Ethereum is currently in a critical phase as the price failed to break the resistance around $2,450 and is trading in a narrow range between $2,300 and $2,400.
At the time of writing, Ethereum is trading at $2,310.65, down 0.04% since it opened early Tuesday in Asian trading.
After surging about 33% from its February low, the upward momentum has slowed and the market is now entering a tighter consolidation phase.
This situation usually indicates that the market is gathering energy before determining the next big move.
Interestingly, despite the previous price increase, derivatives data shows mixed sentiment.
Open interest has increased significantly, indicating more speculative activity in the market.
However, the funding rate remains negative, indicating that many traders are still taking short positions despite the price increase.
At the same time, the leverage level has also dropped significantly from 0.76 to 0.57.
This decline occurred when long positions were closed after the price returned to around $2,350, while short positions were either liquidated or closed during the rally.
As a result, the market is now ‘cleaner’ and less at risk of experiencing large liquidations, but also less driven by aggressive speculation.
From a technical perspective, Ethereum is currently in a compression phase, which is a situation where the price is stuck between the support around $2,200 and the resistance of $2,450.
Volatility is decreasing, indicating that the market is in balance between buyers and sellers.
However, Ethereum is still below the declining 200-day moving average, indicating that long-term pressure is still present.
For a breakout to occur, the market needs one key factor: real spot demand. Without real buying, any rally risks failing to last.
If Ethereum manages to break through $2,450 with strong volume, the next target could be $2,700.
However, if it fails to hold the $2,200 support, the price could potentially return to around $2,050.
For now, the market is just waiting for a clear catalyst to determine its next direction.
