Ethereum (ETH) Bounces off Key Support, Sets Stage for $2,500 Retest

Key Takeaways

• ETH has broken out of a multi-month descending channel, pushing the price above $1,800 and suggesting bullish momentum.
• Data shows strong support at $1,796, with over 4 million addresses in profit, boosting ETH’s chances of breaking resistance.
• After weeks of outflows, Ethereum ETFs have posted three straight days of inflows, totaling $64.12 million on April 28.
• If ETH surpasses $1,968, it could rally to $2,426 or even retest $2,500; failure to hold could send the price back below $1,500.

Ethereum (ETH) price is set to end April with its first positive monthly candlestick since December 2024.

This development comes after the cryptocurrency’s value increased by 13.13% within the last 30 days, bringing Ethereum’s price closer to $2,000.

Earlier in the month, the price had fallen below $1,500, suggesting that ETH has entered a bear market phase. But amid improving macroeconomic conditions, things quickly changed.

Will ETH’s price take the same strength into May and trade higher?

Ethereum Leaves Bearish Pattern Behind

As of this writing, Ethereum’s (ETH) price is trading above the $1,800 level after successfully breaking out of a descending channel.

The bearish pattern had persisted since December last year. However, on April 23, ETH broke above the upper trendline, indicating a potential improvement in momentum and invalidating the downtrend.

Supporting this breakout, the Relative Strength Index (RSI) on the daily chart has moved above the neutral 50 level, a sign that bullish momentum is building.

If this trend continues, Ethereum could swiftly reclaim the $2,000 psychological level in the near term.

ETH Support Strengthens Amid Renewed ETF Demand

Analyzing the In/Out of the Money Around Price (IOMAP) indicator further reinforces the bullish outlook. This metric identifies key support and resistance zones by measuring the volume of tokens held at a profit or loss.

Typically, the higher the volume of addresses in loss, the stronger the resistance. Conversely, large volumes of profitable addresses create strong support.

ETH’s strongest support lies around the $1,796 level, where over 4 million addresses hold 6.75 million ETH in profit.

This support zone outweighs the resistance between $1,824 and $2,101, where unrealized losses are comparatively lower.

With demand outweighing sell pressure at critical levels, Ethereum looks ready to break through these resistance zones and potentially climb toward $2,500.

Beyond the technical outlook and on-chain metrics, CCN also reviewed the recent Ethereum ETF flows, which shed further light on the price potential.

Ethereum ETFs suffered significant outflows throughout most of April, amplifying selling pressure and contributing to the coin’s downturn.

However, sentiment appears to have changed in recent days. ETH has now recorded three consecutive days of inflows.

As of April 28, Ethereum ETFs registered $64.12 million daily inflows, pushing total net assets above $6 billion.

If this trend continues, Ethereum’s price will unlikely undergo a significant correction soon.

Instead, the current momentum could support further upward movement in ETH’s market value.

ETH Price Analysis: Bullish Quarter to Continue

Considering the short-term potential, the daily chart shows that ETH’s price will likely break the resistance at $1,968. One reason is the Parabolic Stop And Reverse (SAR) position.

At press time, the dots of the Parabolic SAR are below Ethereum’s current price, indicating strong support for the cryptocurrency. The dotted line would have signified resistance if it were above the price.

Therefore, if ETH breaks through $1,968, the next level for the coin to reach could be $2,426, near the 0.618 golden ratio. If successful, Ethereum’s price might eventually retest $2,500.

However, if it fails to break above the resistance at the 0.786 Fib level, this prediction might not pass. In that scenario, ETH could drop below $1,500 again.