Key Takeaways
What are the key price levels for Ethereum traders to watch?
The $3.4k-$3.6k supply zone and the $2.6k demand zone were key swing points that could decide the next long-term trend.
What will the result of the rounding top pattern be?
While it shows seller dominance now, there is a chance of bullish resurgence, especially if the ETH prices breach the $3.4k level.
Ethereum slid to $2.6k on the 21st of November. Since then, it bounced by 12.2% to reach $2,944 at the time of writing.
By the way, the bounce originated from a key long-term demand zone that had been in place since June.
In other news, the largest Ethereum [ETH] treasury company, Bitmine Immersion [BMNR], announced it had reached 60% of its holdings target.
It now has 3.63 million ETH, 3% of the overall supply. The company’s target is 5% of the supply.
Moreover, whale activity also sparked hope of an Ethereum rebound.
Ethereum price action shows relief bounce but no recovery
Source: ETH/USDT on TradingView
A rounding top pattern has been forming over the past few months. This indicated bearishness recently, as all the gains made earlier have been wiped out.
In fact, the chart pattern encyclopedia noted that the pattern’s bottom is a key support.
This meant the bulls needed to defend the $2.5k area, which was already a critical demand zone, as mentioned earlier. Therefore, even though momentum and capital flow favored the bears now, a bullish reversal is hoped for.
Technical analysis showed that the $3.4k-$3.6k was another key resistance zone.
According to the encyclopedia, aggressive swing traders could wait for a move beyond this resistance before buying.
Until then, the direction of the breakout would remain unclear. Traders and investors should also be prepared for a deeper price drop if selling pressure continues to overwhelm the buyers.
Liquidation pockets still pull prices
Source: CoinGlass
The 6-month Liquidation Heatmap showed that a strong magnetic zone at the $3k level had been swept. There were more liquidations to the south, especially at the next psychological support level at $2k.
It is unclear if Ethereum would be tempted to visit these magnetic zones to the south once more.
Buyer exhaustion and a bearish retest of the $3k level could result in this scenario. The $2.6k-$2.7k is the pivotal support to watch.
If it is lost to the bears, a move to $2k or lower would become more likely. Until then, there is a chance of a move to $3.4k and possibly even further, though sentiment would have to shift dramatically to enable that.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
