Ethereum in Full Retracement: A Can't-Miss Opportunity? Technical Analysis – January 23, 2025

After breaking through the $4,100 mark, Ethereum faced bearish pressure that caused a nearly 30% drop in its price. Let’s examine the future prospects for ETH.

Ethereum (ETH) Price Situation

Ethereum recorded a 70% increase in less than two months, pushing its price from $2,400 to $4,100. Unfortunately, this last level acted as resistance, leading to a decrease in its price of just under 30%.

The price of ETH has reached a new low around $2,900. Thus, the price of Ethereum has validated a notable support area. This is particularly relevant as it is located around the first monthly pivot support, the 200-day moving average, and the 61.8% (Fibonacci level) retracement of its last increase.

At the time of writing this text, the price of Ethereum is trading around $3,200. The cryptocurrency is operating in a significant volume area, highlighting the importance of maintaining its price above this level. Ethereum is currently in a short-term bearish trend. However, this decline could act as a simple retracement of the underlying bullish trend in the medium and long term.

On the ETH dynamics side, it is not surprising that it has been revised downwards, although we can observe a gradual stabilization, suggesting the possibility of an upcoming recovery.

The current technical analysis has been carried out in collaboration with Elyfe, investor and popularizer in the cryptocurrency market.

Focus on Derivatives (ETHUSDT)

The open interest in ETH/USDT perpetual contracts fluctuates in line with the price of its underlying asset, indicating a responsive market where speculative interest follows price direction.

On the CVD side, it is revised downwards, indicating a predominance of market sell orders and contributing to notable selling pressure.

Despite this worrying context, the funding rate remains positive, reflecting a persistent bullish conviction among market participants.

Since the drop on January 19, liquidations have remained limited, reflecting a stable market, controlled volatility, rigorous risk management, and a balance between buyers and sellers.

The liquidation heatmap for ETH/USDT shows that Ethereum rebounded precisely on a significant liquidation zone located around $3,000. This zone seems to have triggered buying orders, given the reaction observed. Currently, the visible liquidation zones appear much less significant. Above the current price, the key levels are: $3,550, $3,780, and finally $4,125, the latter being the most significant. Below the current price, the main identified zones are below $2,900, around $2,700, and near $2,500. An approach of the price towards these levels could trigger a massive order execution, thereby increasing the risk of volatility for the cryptocurrency, making them major points of interest for investors.

Forecast for Ethereum (ETH) Price

• If the price of Ethereum remains above the $2,923 zone, a break above $3,500 could be anticipated, thus paving the way for a target of $3,746, or even $4,100. In case of a continuation of this bullish movement, reaching $4,500, or even the last ATH of Ethereum, could be considered, representing an increase of about 53%.

• If Ethereum fails to stay above $2,923, a pullback towards $2,700, or even $2,600, could occur. The next key support, in case of continued decline, is just below $2,400. Even lower, several support zones need to be monitored, starting with the one at $2,300, which would correspond to a decrease of about 27%.

Conclusion

Ethereum recently experienced a correction phase after a strong increase, but signs of stabilization are beginning to appear. Although the short-term trend remains bearish, the confirmation of the support level could pave the way for a recovery, especially if the cryptocurrency market continues to show positive signals. Therefore, it will be essential to closely monitor the price reaction at key levels to validate or adjust current forecasts. Finally, we remind that these analyses are based solely on technical criteria, and that the price of cryptocurrencies can evolve quickly based on other more fundamental factors.