Ethereum (ETH) is experiencing a notable bullish resurgence, trading near $3,858 as of July 31 after successfully breaking out from a multi-week descending channel. This technical movement has shifted the overall sentiment towards a bullish outlook, with traders now eyeing potential resistance levels between $3,920 and $3,960.
Key Highlights
Ethereum's recent breakout above the falling channel has positioned the asset favorably in the market, indicating strength among buyers. The decisive move beyond the upper boundary of the channel and the formation of higher lows on the 1-hour chart reflect a strong bullish sentiment that has emerged.
The cryptocurrency's price action right now is supported by various technical factors that suggest further upward movement is possible. Notably, the asset has reclaimed its position above the EMA cluster (Exponential Moving Average) ranging from $3,808 to $3,821. This area is seen as a critical short-term support base, providing a cushion for any minor price corrections.
Smart Money Concepts strengthen the bullish outlook, as traders have observed a clear Change of Character (CHoCH) following Ethereum's bounce from the $3,742 demand zone. The increased activity at mid-channel resistances coupled with the establishment of equal high zones indicates institutional accumulation and a strong interest from larger investors.
Positive Netflows Indicate Renewed Accumulation Interest
On-chain data further substantiates the bullish sentiment surrounding Ethereum. As of July 31 at 05:30, Ethereum witnessed a net inflow of $33 million after reaching a price of $3,865.09. This positive netflow marks a departure from the previous trend of outflows observed during earlier rallies, hinting at renewed institutional interest or whale reaccumulation of ETH.
Historically, instances of positive netflows during consolidation periods frequently precede upward price movements. If Ethereum can maintain its momentum above the EMA cluster and break through the $3,865 mark, the path to the next resistance level at approximately $3,960 appears clear.
Key Resistance and Demand Zones
However, potential obstacles remain. A failure to maintain bullish momentum at the $3,960 resistance could prompt a corrective move back toward the $3,742 demand block. This zone is noted for its critical importance, having previously attracted buyers and demonstrated resilience during price adjustments.
In previous analyses, Ethereum's $3,742 demand zone was identified as a major pivot point,
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