Ethereum has been rejected from the crucial 100-day MA of $2.7K, indicating a bull trap. This price action hints at sellers’ dominance, with the asset expecting to continue its descending consolidation stage toward the $2.1K threshold.

Technical Analysis

By Shayan

The Daily Chart

Ethereum recently experienced a surge that breached the 100-day moving average at $2.7K and the neckline of an inverted head and shoulders pattern, triggering a short liquidation event. This initial move was a bullish signal, briefly sending the price higher. However, a rejection at the $2.7K level has led to a 12% decline, pushing the price back below the 100-day MA and the neckline.

This suggests the breakout was false, forming a classic bull trap and highlighting the sellers’ growing dominance. Ethereum is now consolidating near the $2.5K support zone, but the price is expected to continue its descent, with the next major target being the $2.1K support level.

The 4-Hour Chart

In the 4-hour timeframe, ETH’s brief push above the 0.618 Fibonacci level ($2.7K) was met with substantial selling pressure, most likely from smart money or institutional traders. These market participants exploited the liquidity above $2.7K, executing sell orders in a manipulative move that led to a sudden price drop.

Ethereum has since fallen to the lower boundary of its ascending flag pattern, currently sitting around the $2.4K region. This level may provide short-term support and could trigger consolidation within the flag.

ETH could hold at this level for the short term, entering a consolidation phase before determining its next move. If buying pressure increases, a potential retest of the $2.7K resistance might occur. However, a breakdown from the $2.4K support would likely trigger further bearish momentum, with Ethereum heading toward the $2.1K critical support as the next primary target.

Onchain Analysis

By Shayan

The aforementioned significant rejection at the $2.7K resistance zone represents an area characterized by a high concentration of short positions. The futures market analysis sheds light on the underlying dynamics, as sma