Ethereum Faces Resistance at $2.4K, Potential Retracement to $2K Support Zone

According to CryptoPotato, Ethereum's recent surge in momentum encountered a significant obstacle upon reaching a pivotal resistance area, encompassing the upper boundary of a multi-month wedge and the static resistance at $2.4K. Despite this, the emergence of a head and shoulders pattern suggests an impending retracement towards the $2K support zone.

Ethereum witnessed a robust uptrend, achieving an annual peak of $2.4K, underscoring the prevailing influence of buyers in the market. This upward trajectory is further emphasized by a golden cross on the daily chart, signaling an overall bullish sentiment for Ethereum. However, the ascent was impeded upon encountering a critical resistance zone formed by the upper boundary of the multi-month wedge coinciding with the crucial static support at $2.4K. The resultant heightened selling pressure put a halt to the existing bullish momentum.

Despite these challenges, a potential head and shoulders pattern, a widely recognized bearish reversal formation, has taken shape. The price is teetering on the brink of breaking below the pattern’s neckline, represented by the orange line. Additionally, an extended bearish divergence between the price and the RSI indicator suggests the potential for downward movement in the coming days. Considering recent price developments, a breach below the neckline of the pattern could pave the way for a short-term downward movement. The anticipated retracement would likely lead the price back toward the substantial support range at $2K.

A closer inspection of the 4-hour chart reveals that amid recent sideways movement, the price found robust support within the critical range between the 0.5 ($2,211) and 0.618 ($2,166) levels of the Fibonacci retracement indicator. It acted as a barrier, preventing further downward attempts. Notably, this essential support range aligns with a dynamic, supportive trendline, adding additional strength against Ethereum sellers. Nevertheless, a scenario in which sellers gain control and push the price below these crucial support levels could trigger a notable cascade, prompting a retracement towards the $2K support region.