Ethereum (ETH) Technical Analysis – 2025-07-22

I. Trend and Price Structure Analysis

1. Long-Term Trend (Daily Chart)

• Prior Range and Accumulation (April–July 2025):
  • ETH traded in a wide range: $1750–$2600 from late April through end of June, forming a base through multiple higher lows, suggesting accumulation post-drop.
• Breakout and Acceleration:
  • Early July: Explosive breakout above $2600. Rapid price acceleration to $3800 region, with large green candles and massive volume spikes (e.g., July 15-17)
  • Momentum continued: July 16-21: each daily session closes strongly green with higher highs and higher lows (from $2942 => $3763).
• Recent Pullback:
  • July 21-22: Signs of resistance and cooling off, as ETH fails to close above $3800 and pulls back to the $3700 area.

2. Short-Term Trend (Hourly Data – Last 24 Hours)

• Volatility Expansion and Contraction:
  • First half: Wild swings between $3700–$3800, heavy volume on both up- and down-moves (see: $3856 high, quick drop to $3705 low)
  • Second half: Range contracts into $3650–$3720, bearish undertone as lower highs form, and wicks pierce $3630–$3640 zone but quickly bought up.
• Support and Resistance Reactions:
  • $3630–$3650 area acts as intraday support (buyers defend aggressively).
  • $3720–$3750 repeatedly caps bounces, indicating short-term resistance.

II. Indicator Analysis

1. Moving Averages

• 50-day MA (Estimate): Likely in $3100–$3300 range (well below price), very bullish.
• 20-day MA: AT or just below $3650–$3700 — ETH is currently holding around or above short-term MAs, a sign of uptrend health.
• Shorter-term (Hourly) MAs:
  • 20/50 EMA (H1): Price repeatedly bounces at/above $3640–$3650, often returning over $3700 quickly – buying strength on dips.
  • Conclusion: Uptrend is strong but encountering short-term resistance; no clear bearish cross.

2. RSI (Relative Strength Index)

• Daily RSI:
  • Likely at 70–75 (overbought but in a bull trend, can persist at high levels).
• Hourly RSI:
  • We saw readings >70 on July 21 (local top), now cooling to 55–60, reflecting consolidation and partial reset.
• Divergence:
  • No strong bearish divergence yet; cooling RSI is healthy after surges.

3. MACD

• Daily MACD: Strong bullish cross, expanding histogram, but signs of flattening – bullish momentum still present but some deceleration.
• Hourly MACD: Rolls over from peak, signal lines compressing, but histogram stays positive — suggests short-term pause, not reversal.

4. Volume Profile

• Notable Spikes: Record-breaking volumes on July 16-18 (breakout phase) and again during push to $3850. Current volume dropping slightly, typical for consolidation.
• Interpretation: No distributive topping action detected; volume dropoff after rally is normal bullish digestion.

III. Price Action Patterns

1. Bull Flag / Pennant Formation (Short-Term)

• After impulsive rally from $3150 to nearly $3850, ETH is moving sideways-to-down in a tight range ($3640–$3750). Lower volatility, declining volume, and repeated rejections above $3720 suggest a classic bull flag/consolidation.
• These patterns typically precede a continuation move in the original direction (up).

2. Failed Breakdown Attempts

• Several times in the last ~24h, ETH dipped to $3625–3640, only to be sharply bid back to above $3700, as seen in the 8:00, 13:00, 19:00 hours — bears unable to sustain momentum. This illustrates latent demand, typical for ongoing bull runs.

3. Key Levels Identified

• Immediate Resistance: $3720 (short-term), $3750 (hourly swing high), then $3800 and $3850 (cycle high)
• Immediate Support: $3640 (strong), then $3625, deeper at $3580 and $3550 (prior swing lows), major at $3475

IV. Volatility & Sentiment Analysis

• ATR (Average True Range) Analysis:
  • Elevated, with hourly swings exceeding $60–$80, suggesting shakeouts but also opportunity for momentum.
• Sentiment:
  • Broad bullishness persists after ETF, technology upgrades, and strong crypto market backdrop. No major reversal signs.

V. Price Action Scenarios & Probability

Scenario 1: Continued Bull Flag Breakout (Primary)

• ETH consolidates for 6–18h in $3640–$3720, then breaks out on fresh volume, retesting $3800 and likely making new highs towards $3850–$3900 in the next 24h.
• Probability: 70%

Scenario 2: False Break/Bearish Trap (Secondary)

• Price wicks below $3640–$3625 on low liquidity, flushes weak longs, but buyers step in aggressively, swiftly reclaiming $3700. Would provide ideal long entry.
• Probability: 20%

Scenario 3: Breakdown/Correction (Low-Probability)

• ETH loses $3620, closes below $3580 (invalidates short-term bull trend). Next support at $3540–$3475, but macro uptrend intact until then.
• Probability: 10%

VI. Optimal Trading Strategy

Direction & Rationale

• Bias: Strongly bullish despite overbought readings — consolidation after a powerful move is usually continuation, not reversal, especially given rapid recovery from dips and lack of distribution volume.
• Risk: Short-term volatility is above average; buying near support ($3640–$3665) maximizes reward-to-risk.
• Invalidation: Close below $3580–$3550 would negate the bullish thesis short term.

Entry Plan (Optimal Order Opening)

• Buy Zone: $3655–$3670 (slightly above the lower end of the current trading range and where repeated buying has materialized)
• Target: Test and breakout of $3800–$3850, with stretch targets at $3900 if momentum persists.
• Stop Loss (not asked but prudent): $3580

VII. Combined Analysis Outcome

All major technical tools (trend, price action, pattern formation, key moving averages, successful defense of higher lows, and healthy volume behavior) point to continuation of the uptrend after this brief consolidation/pullback. The bull flag structure, persistent dip-buying, and lack of topping/distribution signal a high probability of a renewed leg higher within 24 hours.

Conclusion: BUY (Long Position) on ETH

• Open Long Order: $3665 (optimal entry near support)
• Target / Take Profit: $3845 (just below $3850 resistance)

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Summary Table:

Action	Open Price	Target Price
BUY	$3665	$3845