Is Ethereum (ETH) Poised for a Breakout After 5-Month Descending Channel?

A few signs of recovery have started to be seen in the crypto market, with Ethereum‘s present price of $1,648.6 showing a 1.8% increase over the past 24 hours. Even while Bitcoin rose above the $84,000 threshold, Ethereum has been caught within a descending channel since December 2024.

The price of Ethereum plummeted by more than 65% from around $4,000 at its peak, as it stands today.

Ethereum Price Analysis

According to the daily chart, Ethereum prices have been under strong bearish trend since December 2024. The crypto asset has developed a descending channel. However, recent price actions indicate ETH has made a bottom near the lower boundary of the channel at $1,465.

The descending channel has captured ETH price for nearly five months, with the price testing the upper and lower boundaries on numerous occasions. Ethereum currently seems to try to break the short term resistance in place, possibly forming the inception of a recovery rally.

Fibonacci retracement levels drawn from the December highs to the April lows denote important resistance areas ahead. The 0.236 Fib level of $2,063 represents the first significant resistance, while the 0.382 proposes resistance at $2,433. These levels will be crucial for any sustained recovery.

All the EMAs are currently bearish. Price is now confronting the immediate resistance of the 20 EMA at $1,722, while further resistance lies at the 50 EMA ($1,988) and 100 EMA ($2,324).

The MACD shows a slight improvement in momentum with a current reading of 5.7, although both signal lines remain below zero at -120.0 and -125.7. This shows that, while the selling pressure is subsiding, the overall momentum is still bearish. A possible bullish crossover might form, which may signify a recovery in the very near term.

Immediate support lies at the channel’s lower boundary close to $1,465, an area that has been twice tested during April. Significant resistance levels include the 20 EMA, at $1,722, and the psychological level of $2,000. Breaking above these levels is essential for the confirmation of trend reversal.

Price Targets

If the current consolidation breaks to the upside of the descending channel, Ethereum would target $2,063 at the 0.236 Fibonacci level. If the buying pressure is sustained, then the price might reach the 0.382 Fib level at $2,433.

Conversely, if the current support fails, Ethereum will retest the April low at $1,465 or even go lower towards the $1,300 territory indicating a complete retracement of 2023-2024 bull cycle.

Ethereum Whale Moves Spark Market Curiosity

Mysterious whale/institution accumulated 15,953 $ETH($26.16M) 5 hours ago, 6 wallets(likely belonging to the same whale) withdrew 15,953 $ETH($26.16M) from OKX and deposited it into Aave. Then they borrowed 15.4M $USDT from Aave and deposited it into OKX.

This giant whale deposited another 20K ETH ($32.4M) into Kraken 5 hours ago. The whale still has 30,874 ETH$ETH ($50.7M) left, with $104M (+52.4%) in estimated total profit.

Funding Rate Turns Positive as Bulls Regain Confidence

As Ethereum prepares for the breakout rally, bullish anticipation rises in the derivatives market. The open interest has hiked up by 4.70%, reaching $18.79 billion, with a 30% hike in volume, reaching $51.15 billion.

Funding is at 0.0060% with a long-to-short ratio of 1.0288 for the last 24 hours.

Extremely bullish sentiments on the short time frame have seen a strong surge, with long positions representing 52.81% in the last 4 hours. This raises the long-short ratio to 1.1191, indicating a strong bullish sentiment as the traders expect a bullish trend in Ethereum.