Can Ethereum Break Free from Its Consolidation Phase?

• Ethereum struggles to break resistance despite rising speculative trading activity.
• Market sentiment remains bearish, limiting Ethereum’s recovery.

Ethereum (ETH) continues to grapple with resistance levels while Bitcoin (BTC) surpasses expectations, recently hitting $93,905. Ethereum, on the other hand, has failed to break above $3,300. It is currently trading at $3,110, down 0.79% in the past 24 hours. Its trading volume has also dropped by 23%, signaling weak momentum.  

Technically, Ethereum has held support above $3,000. The price briefly surpassed $3,120 and $3,150, climbing to $3,224 before facing rejection. It has since retraced, falling below the 23.6% Fibonacci retracement level of its recent move from $3,051 to $3,224.  

Currently trading above $3,112 and the 100-hour Simple Moving Average (SMA), ETH faces resistance at $3,220 and $3,250. A breakout above $3,250 could drive the price to $3,320 and $3,450. However, failure to clear $3,220 may lead to a decline toward $3,140 and $3,050. A break below $3,050 could push ETH to $2,940 or lower.  

Meanwhile, despite bearish sentiment, speculative activity around Ethereum is at its highest in months. 

Ethereum To Face More Downside?

Data shows reserves on derivative exchanges have reached 11.28 million ETH, marking a one-year high. This indicates increased leveraged trading as traders position for future price movements. Open interest has also surged to $18.31 billion, reflecting a $4 billion increase this month. Positive funding rates suggest traders maintain a bullish outlook.  

However, market sentiment remains broadly bearish, dampening demand and limiting Ethereum’s recovery potential. Rising leveraged positions also heighten the risk of volatility due to forced liquidations.  

In conclusion, Ethereum remains at a crossroads, supported by speculative interest but weighed down by weak demand. Key resistance levels at $3,220 and $3,250 will be critical for its short-term trajectory. Until then, Ethereum will likely remain in consolidation, with downside risks intact.

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