Ethereum has formed a notable V-shaped recovery pattern on its 4-hour chart, bouncing strongly from the lows ($1,754.83) and reclaiming the psychologically important $1,800 mark.
The sharp reversal suggests buyers stepped in aggressively at lower levels, with Ethereum now testing critical resistance zones that could determine its next directional move.
Ethereum Ascending Channel
Ethereum continues to trade inside an ascending channel that has contained price action since late April. The recent drop to $1,754.83 represented a test of the channel’s lower boundary, with the subsequent bounce validating this support zone. This channel structure remains intact and provides a bullish framework as long as the lower boundary continues to hold.
Currently trading at $1,829.11, Ethereum has pushed above the 0.5 Fibonacci retracement level ($1,828.93), placing it at a crucial juncture. This level represents the midpoint of the recent swing high to swing low move and often acts as a significant pivot for price action. The ability to reclaim this territory suggests improving momentum, though several hurdles remain before a full recovery can be confirmed.
The next significant resistance lies at the 0.618 Fibonacci level ($1,846.42), followed by the 0.764 retracement at $1,868.06. These levels will likely serve as decision points in the coming sessions, with a break above potentially opening the path toward a retest of previous highs near $1,900.
Moving Averages And Oscillators
The moving average configuration is giving mixed signals, with the 100 SMA (blue line) below the 200 SMA (red line), indicating that bearish pressure still exists from a longer-term perspective. However, price has now pushed above both moving averages, suggesting improving short-term momentum that could potentially shift the longer-term dynamic if sustained.
The stochastic oscillator has made a decisive move upward from oversold territory, indicating strengthening bullish momentum. This oscillator is approaching the overbought zone, which may signal that Ethereum could face some resistance in the near term as it approaches the 0.618 Fibonacci level. However, during strong trend reversals, indicators can remain in overbought conditions for extended periods.
Meanwhile, the MACD indicator in the middle panel shows the blue line crossing above the orange signal line, with the histogram transitioning from red to green bars. This bullish crossover reinforces the positive momentum shift and adds credibility to the recent price action off the channel bottom.
On the downside, should Ethereum fail to maintain momentum above the 0.5 Fibonacci level, initial support can be found at the 0.382 retracement at $1,811.45, which coincides with the 100 SMA. A break below this zone would suggest the recovery is losing steam and could potentially lead to a retest of the ascending channel’s lower boundary.
The broader market context, including Bitcoin’s performance and macro factors like Federal Reserve policy expectations, will likely continue to influence Ethereum’s price action. However, the technical structure suggests improving momentum that could challenge the longer-term downtrend if key Fibonacci resistance levels can be overcome.
