Ethereum’s recent rebound from a pronounced local low of $2,111 has sent its price bounding back toward a pivotal resistance area at the $2,600 mark. However, despite the sudden move upward, current sentiment suggests this latest rally may be more indicative of a short squeeze rather than a sustainable shift in market momentum.
Technically, Ethereum now sits in a crucial zone at $2,600, a historical price region that once acted as critical support but has now evolved to form significant overhead resistance following its recent breakdown. To return the advantage firmly back to bullish hands, Ethereum’s price must decisively surpass this level.
Several key technical indicators converge at the $2,600 threshold, heightening its significance: a substantial Point of Control (POC), the volume-weighted average price (VWAP), and the key Fibonacci retracement level of 0.618 from Ethereum’s recent price swing. Collectively, these factors amplify the difficulty for Ethereum to reclaim and hold above this area without a strong and persuasive surge from buyers.
Additionally, Ethereum recently broke its bullish market structure, invalidating the previous pattern of higher highs and higher lows. The sharp decline that bottomed at $2,111 undermined prior bullish technical progress, leaving bulls with the burden of proving they retain control. Thus, reclaiming the $2,600 level becomes not just beneficial but necessary for reversing the current bearish tilt.
Should Ethereum fail to decisively breach and maintain a hold above the $2,600 resistance, another downturn appears highly likely. Immediate support below comes into play at approximately $2,227, a level that might pause or slow a short-term decline. However, further selling pressure driving prices beneath this support might spark deeper corrective moves, potentially pushing Ethereum down toward the critical support zone at $1,790. This price range is essential, representing a major historical demand zone. If tested, the $1,790 level would serve as an important line of defense against a more significant and prolonged downturn.
Looking ahead, Ethereum’s next price action will be critical in establishing near-term sentiment. An authoritative close beyond $2,600 could kick-start renewed bullish momentum, marking the next target area around the $2,800 region. Conversely, rejection from current resistance levels would sharpen the bearish backdrop, potentially setting off another leg lower toward the near-term support at $2,227, and subsequently the key long-term support at $1,790 if selling intensifies. Until the $2,600 threshold is successfully reclaimed, market conditions suggest caution, with bearish momentum holding sway.
