While the rally has stalled, tension remains high. This is a heavyweight fight a bit below the resistance line. Both forces are testing each other. With that earlier run-up, technically, the bulls remain in charge, but ETH needs to throw that knock-out punch and break through that ceiling convincingly if it supposes to cement this uptrend.

Technical Analysis

The Daily Chart

ETH balances precariously on a knife-edge. On the daily chart, a showdown seems to be there just below the $2,800 ceiling, where the 200-day moving average plus stubborn supply could resist an upward move. But hope shines brightly: the 100-day average remains resilient as a floor near the $2,100 demand zone. ETH is sitting coiled, waiting to unleash inward or upward. A clear breakthrough in either direction would set a strong new trend in motion, so keep your eyes glued to it.

The bulls are losing strength. The Relative Strength Index, or RSI, the main momentum indicator, has now turned downwards from the highs near 66, and this signals the weakening of the upward momentum. This bearish divergence acts as a warning signal that a price correction could very well take place within a few weeks.

The 4-Hour Chart

Prices hit the brakes after the joyride above $2,100 on Ethereum. The 4-hour chart whispers the death rattle of all bull frenzy as the price meanders almost aimlessly in the tight $2,500–$2,600 ascending channel. However, the rogue RSI uptrend suggests buyers are probably sneaking some extra fuel into the tank, readying for an encore. Is this just a pit stop for an encore or the twilight for the bulls?

Riding a true market rally requires a tremendous-volume high breakout from the current shackles. Failing that, look out below! A breach of the $2,600 line – our fragile short-term line of defense – could trigger a full-scale mandage of channels with prices coming back down into $2,100 demand zone.

Sentiment Analysis

Potential breakout in Ethereum. By definition, open interest is growing and now stands at a massive $18.5 billion, right under the previous peak. If we look at combining this huge open interest with increasing prices, this is a loud and clear message from the market indicating that the bulls are loading in big: either leveraged long positions or just heavy bets on Ethereum building up further.

There is a surge in open interest, a neon sign screaming, “bull market ahead!” Traders are treading on each other’s heels, energized by a feverish sense of confidence. Hold your horses-this isn’t a bonafide ticket to the moon. The crowded trade is a lit fuse, especially without a break through the $2.8K upper limit. One sudden strike of fear could culminate into massive liquidations ushering in a hard reality for all bulls. The market is coiled up, but which way will it spring?

However, if that resistance could not be made to break by ETH, get prepared to watch it falling like a stone. Overleveraged bulls can expect a grim reckoning, paving the way for flushing markets.

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