A Stand at a Key Technical Level

Ethereum’s price is at a decisive point after successfully defending the $2,900 region. This level represents a significant long-term support zone that has historically drawn in considerable buying pressure during market corrections. The asset’s ability to hold this line is now being closely watched as a new technical pattern emerges, suggesting a potential shift in momentum.

Understanding the Bullish Divergence

A bullish divergence is forming on the charts, adding strength to the case for an upward move. This technical signal occurs when the price of an asset makes a new low while a momentum indicator, in this case, the Relative Strength Index (RSI), forms a higher low. This discrepancy suggests that the downward selling pressure is weakening, and a potential reversal could be on the horizon. Divergences appearing at major support levels are often considered significant indicators of an early recovery.

Confirmation and Potential Targets

While the divergence has triggered a minor bounce, it isn’t fully confirmed. For the signal to be validated, Ethereum needs to demonstrate a strong, impulsive upward candle accompanied by a clear increase in buying volume. A definitive move like this would signal that momentum has firmly shifted in favor of buyers.

If this confirmation occurs, the next major upside objective is the $3,425 resistance level. This area marks the upper boundary of the current trading range and is a key zone of structural resistance. However, if Ethereum fails to hold the $2,900 support, the bullish setup would be invalidated, potentially shifting momentum back to sellers and reopening the possibility of a continued downtrend.

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