Ethereum Price Rebounds: Bear Trap or Long-Awaited Bull Run Return?While heightened tensions in the Middle East dragged Ethereum prices down sharply over the weekend, technical analysis suggests the market might be brewing a rebound. On the daily chart, Ethereum prices have formed a large bullish flag pattern, with the recent dip briefly pushing prices below the $3,000 support level
Ethereum Price Rebounds: Bear Trap or Long-Awaited Bull Run Return?
While heightened tensions in the Middle East dragged Ethereum prices down sharply over the weekend, technical analysis suggests the market might be brewing a rebound. On the daily chart, Ethereum prices have formed a large bullish flag pattern, with the recent dip briefly pushing prices below the $3,000 support level. However, the market quickly bounced back from the lower boundary of the channel, suggesting the break below $3,000 might have been a false bearish breakout. As a result, ETH is projected to rebound toward the resistance level of $3,600 in the coming days, which is also the higher boundary of the flag. The reaction to these levels will be crucial, as it will determine the long-term market trend.
On the 4-hour chart, the price is approaching the short-term resistance level of $3,300. If the market successfully breaks above the March 1 high, it could rebound toward the resistance level of $3,600 and retest it. The Relative Strength Index (RSI) has also climbed above the 50% threshold, indicating that market momentum is shifting in favor of buyers, which could signal a return to the higher regions of the large channel soon.
Adding to the technical indicators' support, the Ethereum liquidation heatmap also hints that the recent dip might have been a bear trap. Over the weekend, the price briefly dipped below the $3,000 support level, which is considered a key area, leading many investors to potentially set their stop losses there. The liquidation heatmap shows that the drop below $3,000 resulted in the liquidation of a considerable amount of long positions. However, with the cryptocurrency market currently recovering, it can be assumed that the selling pressure generated by these liquidations was offset by sufficient demand. Therefore, unless there are unexpected developments in the short term, the market could target the liquidity zone above $4,000.
In conclusion, despite the recent price drop causing concern, technical indicators and the liquidation heatmap for Ethereum both suggest that the market might be experiencing a temporary pullback rather than a trend reversal. Investors can hold out hope that the long-term bull run is far from over and should closely monitor the price reaction to the $3,600 resistance level in the coming days, which will offer key insights into the future direction of the market.
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