Ethereum continues to trade sideways as price action remains compressed between its main support and resistance zones, thus suppressing volatility.
The market is approaching a sensitive period where recovery may unfold or even weaknesses may occur.
Technical Analysis
By Shayan
Daily Charts
In the daily time frame, ETH remains in the ascending channel for many years. After pulling back from the upper limit of nearly $4.9k, the price is integrated around midrange support.
As long as Ethereum surpasses the dotted trendline and the $4.2,000-$4.3,000 support region, the wider bullish channel structure remains intact. However, losing this area reveals a $3.8K support zone that will require deeper demand. The advantage is that the Bulls must regain momentum, return prices towards the channel's upper limit, reassert control, and target fresh highs.
4-hour chart
The 4-hour chart makes compression more clear. Following a sharp rejection of nearly $4.9,000, Ethereum is trading within a downward channel (marked yellow), but has been repeatedly in demand around a $4.2K support block.
The assets are currently testing this downward channel cap. A confirmed breakout could pave the way to $4.6K-4.7K, but another denial locks ETH into the short-term range, making the market vulnerable to retesting low support.
On-Chain Analysis
By Shayan
The two-week ETH/USDT liquidation heatmap highlights markets that have been caught up in compression, with dense liquidity clusters formed on both sides of current prices. This balanced but fragile setup highlights the risk of liquidity-driven breakouts in either direction.
Conversely, there are key bands with short liquidation over $4,500, ranging from $4,500 to $4,600 zones. Breaking the resistance here neatly ignites the forced short cover waves, causing a sharp rally to rise.
On the downside, similarly severe and long liquidation concentrations are low as around $4,200, or as low as $4,000. Failing to hold a $4,200 base could trigger a cascade of liquidation and accelerate downside volatility to the next major support.
Overall, ETH is integrated within the compression range, with leveraged locations stacked at both extremes. The $4,200 and $4,500 levels act as important trigger zones, with side breaks being first made, likely to direct the next critical move. Until then, traders need to remain cautious as the market remains vulnerable to liquidity hunting and false breakouts.
