Ethereum is currently exhibiting a bullish divergence at the crucial support level of $2,900, suggesting a potential upward movement toward $3,425, provided that trading volume confirms this shift.
The price action of Ethereum has reached a pivotal technical juncture after successfully defending the $2,900 area, a significant high-time-frame support that has historically drawn notable buying activity.
Recently identified bullish divergence between the price and the relative strength index (RSI) strengthens the argument for a possible upward trend. Additionally, Tom Lee”s assertion that Ethereum is entering a “supercycle” has intensified discussions, further fueling market speculation regarding the next major price movement.
Key technical insights reveal that Ethereum”s recent structure shows a retest of the $2,900 support zone, which has proven resilient during previous corrective phases. This area has now generated a significant bullish divergence: while the price has displayed a lower low, the RSI has shown a higher low, indicating an internal momentum shift.
Divergences at such vital support levels frequently signal potential early reversal attempts, underscoring the importance of this development. Up to now, this divergence has led to a modest bounce in lower time frames, indicating the initial signs of demand re-entering the market.
However, for this divergence to be fully validated, Ethereum must produce a strong bullish candle with an accompanying increase in buying volume. A bullish engulfing candle within the volume profile would serve as a robust signal that momentum is decisively shifting in favor of buyers.
Should this confirmation be realized, the next target for upward movement would be the $3,425 level, which represents the upper boundary of the current trading range and corresponds with structural resistance and liquidity pools.
The potential for a move toward this range high becomes technically feasible as long as Ethereum successfully maintains its position above $2,900 and upholds the bullish divergence formation. While upward pressure appears to be building, it is crucial for Ethereum to continue holding this key support level and demonstrate ongoing momentum.
In terms of upcoming price action, a confirmed bullish divergence could propel Ethereum toward the $3,425 resistance level in the near term. Conversely, a decline below $2,900 would invalidate this setup and shift momentum back to bearish trends, potentially prolonging the downward trajectory.
