Ethereum (ETH), the second-largest cryptocurrency by market cap, has recently shown signs of strength after experiencing a significant retracement. Following a decline from the highs near $3,880, ETH found solid support at a critical demand zone, which acted as a launchpad for a bullish reversal. Using the 1-hour chart of ETH/USD on Binance, we can explore key technical structures, including the Market Structure Shifts (MSS), demand zones, and potential price targets.
Demand Zone: Strong Support Around $3,340–$3,420
One of the most important areas on the chart is the clearly defined demand zone between approximately $3,340 and $3,420. This level previously acted as a consolidation base before the rally toward $3,880. After the market retraced, price tapped this zone again, producing a strong bullish reaction, which validates its importance as a high-probability reversal zone.
The long wick and strong bullish engulfing candles from this level suggest significant buyer interest and absorption of sell pressure — a classic smart money accumulation behavior.
Market Structure Shift (MSS): Early Signs of Reversal
Two MSS points are highlighted on the chart:
The first MSS occurred after the price created a higher high relative to the last swing high. This was the first indication that sellers were losing control.
The second MSS was a stronger confirmation, as ETH broke above a key structural resistance around $3,520, establishing a bullish change in market structure.
These back-to-back MSS signals are often seen before a trend reversal and typically attract short sellers being stopped out, which fuels further upward movement.
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Current Price Action and Short-Term Outlook
At the time of writing, Ethereum is trading around $3,670. After breaking above the resistance levels near $3,560, the price has pulled back slightly — a healthy correction that could set the stage for the next leg higher.
As long as ETH maintains support above $3,600–$3,620, the bullish structure remains intact. A successful retest of this area could open the door to the following short-term targets:
$3,720 – Local resistance and potential liquidity area.
$3,800 – Psychological and technical resistance from recent swing highs.
$3,880 – Previous high and major resistance.
If the price fails to hold above $3,600, a deeper retracement toward $3,520 or even a re-test of the demand zone may occur — though this would still be considered a buying opportunity unless MSS levels are invalidated.
Conclusion
Ethereum has reclaimed bullish momentum after respecting a key demand zone and printing clear Market Structure Shifts. These signals suggest that buyers are back in control, and as long as price remains above $3,600, the market is likely to aim for higher resistance levels.
Traders should keep a close eye on intraday pullbacks for potential entries and remain cautious if price revisits the demand zone. With ETH showing strong technical structure, it may soon attempt to challenge its previous highs.
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