Ethereum has staged a sharp breakout from its multi-week consolidation, trading around $2.4K after reclaiming the descending trendline that previously capped its broader recovery. The upward movement is accompanied by accelerating momentum and an increase in short liquidations, though high Relative Strength Index readings indicate potential vulnerability to a near-term pullback.
Daily Chart Analysis
On the daily chart, Ethereum decisively broke above the descending resistance trendline that had been in place for months. Following a consolidation phase below that resistance and the formation of higher lows from the June bottom near $1.5K, the recent surge carried the asset past the $2.1K resistance level to test the $2.4K supply zone.
A sustained daily close above the current supply zone could open the path toward $3K and higher. Conversely, the former breakout area around $2.1K serves as the primary support zone, with the $1.8K region acting as secondary support and the $1.5K zone serving as a deeper structural floor.
Daily momentum has shifted in favor of buyers, pushing the daily RSI above 75 into overbought territory. While this does not invalidate the breakout during a strong expansion move, it raises the probability of a near-term consolidation or retest.
Short-Term Charts and Liquidations
The 4-hour chart reflects a vertical advance following a period of sideways movement above a mildly ascending channel and the $2.1K resistance zone. The 4-hour RSI has surged past 80 and is moving sideways, indicating that the immediate move is stretched. A potential pullback toward the $2.1K level would serve to cool down the market while testing the breakout zone.
Market sentiment data indicates a notable increase in Ethereum short liquidations during the price surge, reaching roughly 28K on the latest spike. This forced closing of bearish positions added buying pressure to the rally, contributing a short-squeeze component. However, this liquidation spike remains below larger events exceeding 40K and 50K seen earlier on the chart.
Overall, the market structure remains constructive provided Ethereum maintains the reclaimed $2K to $2.1K support area, while buyers continue to face the immediate challenge of sustaining momentum above the $2.4K resistance zone.
