Ethereum has been steady since the weekend breakdown from levels above $4,000 to $3,100. Over the last 24 hours, the price action remained sluggish, but bulls seem to have resorted to playing defense and ensure that losses do not extend under $3,000.
At the time of writing, Ether trades at $3,390 amid a gradually building bullish momentum. Its immediate upside appears to have been limited to $3,500. Also contributing to the bearish pressure is the 100 Simple Moving Average (SMA) on the four-hour chart.
Ethereum draws closer to a key technical breakout
The four-hour chart shines a light on the formation of a falling wedge. This is a highly bullish pattern that develops amid a downtrend. Two downward-sloping trend lines create the wedge by connecting a series of lower highs and lower lows.
A breakout is anticipated before the trend lines converge. Note that bulls get ready to take control as the price strikes above the upper trend line. It also shows that bearish pressure is diminishing. Moreover, the breakout is validated by an uptick in trading volume.
ETH/USD four-hour chart
For now, the least resistance path seems upward based on the recovering Relative Strength Index (RSI). A daily close above the midline will add weight to the nascent uptrend. Meanwhile, a break past $3,500 could call more buyers into the market as the path toward $4,000 is cleared.
It is essential to keep in mind the bearish signal from the Moving Average Convergence Divergence (MACD) indicator as shown on the four-hour chart. Therefore, Ethereum is not out of the picture, at least not entirely. In other words, selling pressure cannot be ignored, and support at $3,100 must be defended at all costs.
Ethereum intraday levels
Spot rate: $3,395
Resistance: $3,500 and $4,000