Ethereum's recent 5% rebound has excited investors, yet technical analysts remain cautious. ETH has been stuck in a pattern of lower highs and lower lows since September, indicating a continuing bearish trend.
The $2,700 zone is now emerging as the decisive battleground where the short-term future of the world’s second-largest cryptocurrency is being determined. Trading volumes and Ethereum market sentiment suggest that a genuine test of strength is approaching.
Traders are monitoring this zone with particular attention, as it could determine whether Ethereum finally manages to reverse its technical structure or if a new bearish leg is forming on the horizon.
The recent 5% bounce observed on Ethereum is insufficient to invalidate the bearish trend established since September. The series of declining peaks and troughs remains intact, which constitutes a classic technical signal of structural weakness. Experienced traders know that a simple bounce does not make a trend reversal.
On the other hand, ETH is in a major demand zone on the daily timeframe. A rebound up to $3,480 in the coming days or next week is therefore still quite probable.
The 3-day chart shows that ETH is on the verge of losing its Fibonacci median band. In case of a drop to $2,500, this would make the task more complicated for bulls to climb back up. The current $3,000 level would then become the major resistance to overcome.
A rejection at this resistance would confirm the bearish structure and could trigger a new test of lower supports around $2,300-$2,400. The current momentum remains insufficient to convince institutional investors to enter the market massively.
Technical indicators are offering mixed signals that require heightened vigilance. The RSI should be monitored on the 2-hour timeframe, as it is currently in neutral territory. A break above $3,200 would take ETH to the $3,300 resistance. This level will be crucial for regaining $3,400. If ETH fails to break through $3,300 and a bearish divergence forms on the short-term RSI, caution will be warranted.
Conversely, a loss of the demand zone at $2,900 would take ETH down to $2,780.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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