Ethereum has completed a period of sideways movement and exhibited strong growth, reaching a critical resistance level.
Technical Analysis
On the daily chart, Ethereum continues to respect its broad ascending channel, with the latest surge carrying price directly into the $4.7K–$4.8K supply zone. This region has acted as a ceiling before, and its overlap with the upper channel boundary amplifies its importance.
A confirmed daily close above this barrier would significantly increase the probability of a retest of the $5K threshold. However, rejection here could trigger a cooling phase back toward the mid-channel zone around $4.4K–$4.2K, an area reinforced by trendline structure and key support for bulls to defend.
Sentiment Analysis
Ethereum’s latest upswing was fueled by a sharp short squeeze, as clustered leveraged shorts were liquidated once the price broke above local highs. This liquidation cascade created rapid upward momentum, flushing out sellers and clearing liquidity from the upside.
However, the squeeze also left behind a dense liquidity pocket in the $4.5K–$4.4K range, just beneath recent lows. This zone now becomes critical to monitor. If Ethereum stalls at the current resistance cluster, price could gravitate back to this liquidity pool to rebalance and test underlying demand.
Ethereum's Outlook
In short, Ethereum’s breakout unfolded precisely as anticipated: short pressure unwound into a powerful push higher, but the sustainability of this move now hinges on buyers’ ability to defend reclaimed levels. The next sessions will decide whether Ethereum consolidates strength for a fresh ATH attempt or retraces to absorb fresh liquidity.
Ethereum has broken its week of sideways movement and approached an important resistance level. Upcoming sessions will be critical for its future movements.
