- Ethereum faces strong resistance at $2.8K, with bulls trying to push through despite a bearish market structure.
- Ethereum’s leverage ratio and rising open interest hint at potential short-term bullish movement, but a breakout may lead to a bull trap.
Ethereum’s price action has drawn significant attention as it battles the key $2.8K resistance level. Despite brief bounces, ETH has struggled to maintain upward momentum. The crypto market’s volatile nature has investors wondering whether Ethereum can push through this critical resistance or if a bearish reversal awaits.
Ethereum Bearish Market Structure Persists
Ethereum’s market structure remains largely bearish, with the price falling below the $2.8K zone—a level that held as strong resistance from August to November 2024. The losses Ethereum suffered in November discouraged many investors, leaving the market uncertain about ETH’s short-term future.
Support Levels Hold, but Buying Pressure Weakens
Yet, the Fibonacci retracement levels at 61.8% and 78.6% continue to provide some support. However, buying pressure remains weak, and market participants are cautious. Ethereum’s current market environment signals mixed expectations.
Leverage Ratio Points to Growing Optimism
The surge in Ethereum’s estimated leverage ratio (ELR) offers a glimpse into potential future movements. The ELR measures speculative sentiment by comparing the exchange’s open interest to its coin reserves. Higher ELR levels typically suggest bullish market sentiment. Recently, the ELR began bouncing back after a drop in early February, reflecting growing optimism in the market.
Open Interest and Exchange Movements Suggest Increased Activity
Alongside the ELR’s recovery, Ethereum’s open interest saw an increase, climbing from $13.3 billion to $14.2 billion. This coincided with ETH’s price rise from $2.5K to $2.7K, further signaling that some market participants are positioning for a possible rally.
Another bullish signal is the movement of Ethereum from exchanges. Over the past two weeks, a significant amount of ETH has left exchanges, which generally indicates accumulation. However, this alone is not enough to confirm a trend reversal. The combination of rising open interest and a declining coin reserve points to increasing speculative activity, which could drive ETH prices higher in the short term.
Liquidation Heatmap Shows Potential for a Bull Trap
Ethereum’s liquidation heatmap also offers important insights. It highlights a large liquidity pocket between $2.8K and $2.88K. This area acts as a magnet for price action, suggesting that ETH may make a move toward this range. However, a breakout past $2.8K could lead to a rush of leveraged trades, potentially resulting in a bull trap near $2,880.
Ethereum Path Ahead: Breakout or Reversal?
If Ethereum surpasses the $2.8K resistance, it could spark renewed optimism, but the possibility of a quick bearish reversal remains. Investors should stay cautious as ETH’s next move could either mark the start of a rally or the beginning of another pullback.
Ethereum’s performance in the coming days could set the tone for its future price action. Whether ETH bulls can successfully break through the $2.8K resistance will determine the path forward for Ethereum.
