Ethereum’s Renewed Strength: Why Bulls Still Face Key Hurdles Ahead

Ethereum is bouncing back after months of ups and downs in price. The chart looks better now, with signs that buyers are stepping in. But don’t get too excited yet. There are big resistance levels above that bulls must break to confirm a real rally. In this post, we dive into the technical details, key price targets, and what it all means for your trades.

Market Structure: A Bounce, But Not a Breakout

Ethereum’s price has done something important. It broke above the 1D Bull Market Support Band. This is a key zone on the daily chart that has acted as a turning point many times in the past few months. When ETH price stays above this band, it often signals the start of a bull move.

However, experts are still cautious. The overall market structure does not scream ‘bull market’ yet. The bounce is nice, but it could be a trap. Traders call this a ‘fake-out’ – a short rise before a drop.

The main problem? A tough resistance at the 0.618 Fibonacci Point of Interest (POI), sitting around $3,120. Fibonacci levels come from a math tool used in trading. The 0.618 level is a common spot where price stops and turns back.

To turn truly bullish, Ethereum needs to not just touch $3,120, but hold it as new support. That means price should bounce from there multiple times without falling below. Until then, lower time frame charts (like 4-hour or 1-hour) will stay bearish.

Bitcoin’s Chart Gives a Warning

Look at Bitcoin for clues. BTC is in a similar spot – testing resistance without a clean break. Ethereum often follows Bitcoin’s lead in crypto markets. If BTC rejects its Fib level, ETH could do the same.

Smart traders stay defensive. Keep some cash on the side. This hedges your bets if price falls. A drop below current levels might send ETH back to $2,700, an old resistance turned support. From there, a real bottom could form for a stronger uptrend.

• Defensive strategy: Hold spot ETH but keep 20-30% in cash or stablecoins.
• Entry point: Wait for $3,120 to flip support.
• Stop loss: Below the Bull Market Support Band for safety.

A Bright Spot: Closing Above the 50-Day Moving Average

Here’s some good news. Ethereum just had its first daily close above the 50-day moving average (MA) since early October. Back then, a big liquidation event shook the whole crypto market. Prices tanked hard.

The 50-day MA is a simple trend line. It averages price over 50 days. Closing above it after months below shows buyers are in control again. This is a classic bull signal after a long correction.

Momentum is building. Short-term averages are turning up. Capital is flowing back into ETH as risk appetite grows. This sets the stage for more gains.

Next Big Target: The 200-Day Moving Average at $3,550

With the 50-day MA reclaimed, eyes turn to the 200-day MA around $3,550. This is a major long-term trend line. Breaking it would confirm Ethereum’s renewed strength on higher time frames.

Expect choppy action on the way up. Volume needs to rise, and sellers should dry up. If ETH reaches $3,550, it could spark FOMO buying. That’s when alts might rally too.

Historical data shows: When ETH reclaims the 200-day MA after a dip, it often runs 20-50% higher in weeks.

Why These Levels Matter for Everyday Traders

Technical levels like Fib POIs and moving averages are not magic. They work because many traders watch them. When price hits $3,120, sellers pile in. Buyers must overpower them.

For newbies:

1. Check daily charts first for big picture.
2. Use 4-hour for entries.
3. Never risk more than 1-2% per trade.

On-chain metrics back this up. ETH exchange inflows are dropping – less selling pressure. Staking is up, locking supply. ETF flows could add fuel if approvals come.

Risks and What to Watch Next

Bulls have work to do. A rejection at $3,120 could mean more pain. Watch macro news too – Fed rates, inflation data affect crypto.

Volatility is high. Use tools like TradingView for alerts on these levels.

Final Thoughts: Cautious Optimism for Ethereum

Ethereum’s renewed strength is real, but unproven. The Bull Market Support Band break and 50-day MA close are wins. Now, conquer $3,120 and $3,550 to roar higher.

Stay patient. Trade smart. The bulls might win, but they need to earn it. What do you think – is ETH ready for $4,000? Share in comments.

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