Ethereum (ETH) price finally broke the $2K barrier, trading at around $2,300 after going past critical resistance. This raises hopes it could climb to $3,000 and $4,000.
The sharp move up started after the Federal Open Market Committee’s decision to hold interest rates steady on May 7 led to an across-the-board risk-on digital assets.
With the top altcoin price clearing critical levels and on-chain metrics flashing bullish signals, the stage is set for a significant upside move.
ETH Price Breaks Key $1,860 and $2,300 Resistances
According to Ali Martinez, Ethereum price recently broke above the $1,860 resistance, a critical zone where 4.54 million wallets hold 5.58 million ETH. The top altcoin has finally broken out of an important supply wall, which had been capping its progress for the past few weeks, marking a massive change in market sentiment.
As the price has rebounded above this level and is now holding strong, Ethereum could rally for the long term with potential goals for $3,000 and $4,000.
Source: Ali Martinez, X
Additionally, crypto analyst IncomeSharks highlighted that ETH price has also cleared its second diagonal resistance, confirming a broader trend reversal. The chart showed ETH moving steadily higher after multiple buy signals along the lower trendline.
With the next major resistance zones at $3,000 and $4,000, traders are eyeing a potential multi-month rally if the current momentum holds.
Source: IncomeSharks, X
Bullish Divergence and On-Chain Data Support ETH’s Rally
Notably, Javon Marks noted a major bullish divergence in the price chart for Ethereum, a classic reversal pattern signaling forthcoming major price recovery.
According to his analysis, ETH had a double bottom with momentum indicators such as the Relative Strength Index (RSI) starting to rise, indicating a bullish divergence.
This technical arrangement was usually a sign of a new trend commencing with price targets much higher than the current ETH price.
Source: Javon Marks, X
Meanwhile, on-chain data also supported this bullish outlook. According to recent figures, Ethereum’s open interest soared by 2.65% to about $21.35 billion over the past 24 hours as $400 million worth of new capital jumped into ETH futures. The rise in open interest meant traders are positioning for a larger move.
Derivatives Market Signals Strong Bullish Sentiment
The derivatives market is also reflecting a strong bullish bias for Ethereum. Binance’s ETH/USDT long/short ratio stands at 2.1486, while OKX traders show an even more aggressive stance with a ratio of 2.26. This means more than twice as many traders are long versus short, indicating a strong belief in further upside.
Source: Coinglass
For top traders on Binance, ratios of long/short positions have risen to 2.8153, indicating increased confidence in Ethereum’s upward slide. This is consistent with market sentiment, as traders set up for further upside. The long exposure and the increase in open interest suggest that the market is anticipating a significant ETH price move in the coming weeks.
Moreover, liquidation data also supports this bullish trend. For the past 12 hrs, ETH shorts accounted for $14.33M in long liquidations and $6.07M in ETH short liquidations. This showed that Ethereum traders who were betting against a price recovery have been squeezed out.
ETH Price Eyes $4,000 as Key Levels to Watch
Notably, Ethereum price is struggling to trade above $1900 as the next major resistance line is $1950, and next up is the $2000 level.
However, Ethereum (ETH) price is expected to continue its recent momentum to avoid a pullback towards the $1,860 support zone, which has now flipped from resistance.
In the near term, with the Fed’s rate pause as the catalyst, this might just be the beginning of Ethereum’s recovery. As technical indicators improve and market sentiment turns bullish, the outlook for the altcoin strengthens, suggesting a potential breakout in the coming months.
