Ethereum has broken below a short-term triangle holding pattern after attempting to hold its ground in the previous weeks, although the longer-term uptrend line is still intact.
The cryptocurrency is currently trading at $2,499.78, inching closer to the 38.2% Fibonacci retracement level at $2,395.69 and suggesting that bulls could be ready to defend the trend at lower correction points.
Price action is could soon test confluence of the 38.2% Fibonacci retracement and the psychological $2,500 level. The next major hurdle lies at the 50% retracement around $2,271.17 then the $2,250 minor psychological level close to the ascending trend line.
More significantly, the 61.8% Fibonacci level at $2,146.65 could act as strong support if a major pullback materializes, potentially putting it back on track to test the highs at $2,798.80 in a recovery case.
Moving Average Structure
The moving average configuration has turned decisively bullish, with price trading well above both the shorter-term and longer-term moving averages.
The blue 100 SMA and red 200 SMA appear to be in a bullish alignment, providing dynamic support for any near-term weakness. This represents a significant shift from the bearish crossover that persisted during the decline from the 2024 highs.
The ascending black trend line that connects the April lows continues to act as a crucial support level, reinforcing the view that Ethereum has established a meaningful bottom. Any pullback that holds above this rising support would maintain the constructive technical picture and potentially set up another leg higher toward the $2,800 target.
Mixed Momentum Signals
The MACD indicator in the middle panel shows that bullish momentum peaked during the initial breakout phase in early May, with the histogram bars gradually diminishing in size. While the MACD lines remain in bullish territory above the zero line, the weakening momentum suggests that the rally may be entering a consolidation phase rather than extending immediately higher.
The stochastic oscillator presents a more neutral picture, currently residing in the middle range around the 50 level. This positioning suggests that Ethereum is neither overbought nor oversold at current levels, leaving room for movement in either direction. The recent stochastic readings have shown multiple cycles between overbought and oversold conditions, indicating healthy price rotation during the recovery phase.
Volume patterns during the recent advance appear supportive, with increased activity accompanying the downside breakout from the triangle. However, volume has moderated as price approaches the current support zone, which is typical behavior as markets digest significant moves and prepare for the next directional phase.
The technical outlook for Ethereum remains constructive as long as the ascending trend line support holds and the moving average structure stays bullish. A decisive break above $2,500 could trigger accelerated buying toward the $2,800 level, while any pullback toward the $2,250 support zone would likely attract fresh buying interest from momentum traders looking to join the recovery trend.
