Step-by-Step Technical Analysis of Ethereum (ETH) - 2025-08-06

1. Long-Term Trend Analysis

Examining the daily candles from May to early August, ETH has exhibited a major structural shift. The token moved from a consolidation range of ~$2200–$2700 to a sharp, multi-week bullish breakout through the $3000, $3500, and recently $3800 levels.

Structural Observations:

• The rally between July 9th–July 21st showed consecutive bullish daily closes, high volumes, and increased trading ranges, indicating strong accumulation and possibly FOMO buying.
• The market topped out at ~$3940 (July 28), with subsequent retracement to $3392 (Aug 2) before a recent bounce.
• Volatility remains high—a key ingredient for deep retracement and impulsive legs.

2. Support and Resistance Mapping

• Key Resistance: $3850–$3940 (recent top, July 28)
• Key Support: $3390–$3480 (recent cycle low, tested on Aug 2)
• Mid-Range Support/Resistance: $3600–$3700 (recent volume cluster and current price zone)

The current price ($3675) sits just beneath the lower end of the major resistance zone ($3700), after having rebounded sharply from its recent low.

3. Fibonacci Retracement Analysis (July 28 peak to Aug 2 trough)

• 0.236: ~$3530
• 0.382: ~$3624 (broken intraday)
• 0.5: ~$3666 (currently testing this level)
• 0.618: ~$3706 (just above the market, likely strong resistance)

ETH is trading at the 50%–61.8% retracement zone—often a pivotal area where reversals or continuations are decided. The failure to reclaim 0.618 could fuel further profit-taking.

4. Moving Average Analysis (20/50/200 period, Daily/4-Hour)

• Daily 20MA: ~ $3700 (estimated from last closes)
• Daily 50MA: ~ $3550 (serving as dynamic support during recent drop)
• Daily 200MA: ~ $2950 (well below market, confirming long-term bullishness)

Current price is battling with the short-term mean (20MA), failing to breakout above this resistance level.

• On the shorter 4-hour timeframe: the 20/50MAs are flat as price churns between 3625–3695, showing indecision and suggesting consolidation before a breakout/breakdown.

5. Oscillator Analysis: RSI & MACD

• RSI (Daily): Retraced from overbought (>70) to neutral (~55–60), now rising but not yet stretched. Could support another move higher, but may also quickly revert if resistance holds.
• MACD (H4 & Daily): Histogram showing decreasing momentum on both, with fast/slow lines flattening—momentum cooling, signaling possible near-term mean reversion or short-term top.

6. Order Flow & Volume Analysis

• Recent hourly candles (esp. last 4 hours) show lower highs on price and volume, indicating sellers are absorbing rallies above $3680–$3695.
• Volume on the rebound from $3390s was strong, but has since waned as the price approaches $3700.
• Prior bullish legs were supported by heavy bids—current rally is on less enthusiasm, suggesting exhaustion.

7. Price Action/Pattern Observation

• A potential bearish rising wedge is forming between $3600 and $3700 on the 1-hour chart, characterized by higher lows but waning upside momentum. Downside breakdowns from such wedges are statistically common following uptrends.
• The rejection at $3695–$3700 (multiple hourly wicks) and inability to sustain above $3700 is indicative of supply pressure—previous support turned resistance.
• Immediate market looks toppy and at risk for a short-term pullback.

8. Elliott Wave Count

• Tentative wave counts suggest: Wave 3 completed at $3900, correction wave (4) to $3390–$3480, now in a choppy wave 5 that is failing to gain strength. If this wave fails, deeper retracement is likely.

9. Statistical/Volatility Indicators

• ATR (Average True Range, Daily): Peaked in late July and is contracting—a signal that price swings may reduce, leading to a consolidation before next trend expansion.
• Bollinger Bands: Price currently at the mid/upper band on daily, but with the bands tightening. This hints at an impending volatility spike, often preceded by a fakeout or mean reversion.

10. Sentiment and External Factors

• The previous rally coincided with broad risk-on sentiment across crypto. BTC paused at $70k+; if Bitcoin corrects, ETH likely follows.
• No significant data-driven spikes visible for ETH alone. Move is likely technical.

Synthesis

• Momentum is waning on lower timeframes. ETH is at key resistance and the midpoint retracement of the recent high/low range.
• Failure to decisively break $3700/3720 will likely send ETH back to $3550–$3480 for a retest of the lower support cluster. High likelihood of a short-term top in current zone.
• The risk:reward on a fresh long at $3675 is poor; instead, a tactical short setup is present.
• If sellers break 3600, a swift move to $3500 isn’t out of the question within the next 24hrs.
• Sellers would want to place stops above 3720 and target a move to the mid-$3500s, possibly extending to $3480 if risk-off flows intensify.

24-Hour Price Prediction

Downside pressure expected. Range: $3475 – $3700. Probability of brief intraday bounces, but overall bias is for a test lower.

Final Decision: 'Sell' (Short Position)

Optimal Trade Execution

• Open Short near $3675–$3680 (current price zone, with add at $3700 if available)
• Target/Take Profit: $3520 (first key support, front-running the $3500 level)
• Stop Loss: $3720 (just above resistance cluster and 0.618 retracement)

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