Ethereum Price Analysis: ETH Rally Cools, Can it Dodge a Major Correction?
Main Idea
Ethereum's price has surged towards $3,800 after breaking above $3,000, but signs of overbought conditions and bearish divergence suggest a potential cooldown or pullback before further upward movement.
Key Points
1. Ethereum remains in a strong uptrend, trading around $3,660 after briefly touching $3,800, with key support at $3,300.
2. The RSI peaked above 78, indicating overbought conditions, and is now cooling down, with bearish divergence observed on the 4-hour timeframe.
3. A breakdown below $3,500 could lead to a correction toward $3,200, while a breakout above $3,800 with strong volume is needed to confirm further gains.
4. Funding rates have turned positive but are not yet at euphoric levels, suggesting potential for continued upward movement without immediate overheating.
5. Traders should monitor funding dynamics, as a sudden surge could indicate overheating and precede a sharp correction.
Description
After a sharp breakout above $3,000, Ethereum has rallied toward $3,800, fueled by strong momentum and bullish market conditions. The rally has pushed ETH to levels not seen since early 2025, flipping key resistances into support. However, signs of short-term exhaustion are beginning to surface, raising the possibility of a cooldown phase before any continuation higher. Technical Analysis By ShayanMarkets The Daily Chart On the daily chart, ETH remains in a strong uptrend, holding well above bot...
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