Ethereum tests $1,860 resistance zone, but first, ETH must overcome…

• A 5.58 million ETH supply barrier near $1,860 could trigger sell pressure and stall momentum.
• Whale retreat and long-heavy positioning raise liquidation risks during Ethereum’s resistance breakout attempt.

Ethereum [ETH] approached a key resistance zone, with on-chain data revealing nearly 4.54 million wallets holding 5.58 million ETH between $1,850 and $1,880.

This cluster represents a major barrier, as many of these holders may be looking to exit at break-even, creating strong sell pressure. 

On top of that, the level carries psychological weight, especially after recent gains. At press time, ETH traded at $1,914.85, up 4.44% in 24 hours.

Rising reserves and long-heavy positions signal growing volatility risk

Exchange-related metrics raise caution despite the recent price increase.

The total Exchange Reserve climbed 4.32%, signaling that more ETH is being transferred to exchanges. 

Typically, rising reserves suggest that investors are positioning for potential selling, especially as prices test resistance. While inflows to derivatives platforms could imply hedging, this uptick during a price climb often points to profit-taking preparations. 

As such, the market may encounter higher volatility if the trend continues alongside waning buy-side demand.

Source: CryptoQuant

Long bias builds, but risks follow

The derivatives market showed aggressive long positioning that may be fueling ETH’s rally. Open Interest has surged by 10.07%, reaching $13.1228 billion, reflecting a wave of new positions. 

Additionally, the Long/Short Ratio on Binance showed that 59.5% of traders are long, while only 40.5% are short. While this long dominance reflects bullish conviction, it also introduces liquidation risk. 

If Ethereum fails to break above resistance convincingly, overly leveraged long traders could accelerate downside pressure through forced liquidations.

Large transaction volume is declining as whales reduce exposure

On-chain whale behavior does not confirm bullish momentum.

Large Transaction Volume dropped by 5.44%, flashing a bearish signal. In fact, such drops often suggest either hesitation or strategic exits by large holders.

Typically, a rise in Large Transaction activity precedes or accompanies major breakouts, but the current decline may reflect caution due to Ethereum’s proximity to a well-defined sell zone.

Therefore, limited whale support weakens confidence in the rally’s sustainability.

Source: IntoTheBlock

Ethereum confirms a bullish reversal with an inverted head and shoulders

Despite cautious on-chain signals, Ethereum’s price structure looks technically optimistic.

A clean breakout above a long-term descending trendline has occurred alongside the formation of an inverted head and shoulders pattern. 

This classic bullish reversal setup suggests the potential for a sustained uptrend if the price holds above the neckline. 

Moreover, the Parabolic SAR flipped bullish, reinforcing upside momentum. As long as ETH holds above the neckline, a continuation remains likely.

Source: TradingView

Can Ethereum break past $1,860 and sustain its rally?

Ethereum’s current momentum is supported by strong technical patterns and retail enthusiasm.

However, on-chain metrics reveal substantial resistance and cautious whale behavior, paired with elevated exchange reserves and aggressive long positioning. 

If ETH successfully breaks through the $1,860 resistance zone, it may trigger a fresh leg up. Otherwise, failure to do so could result in volatility spikes and a sharp retracement.