Ethereum Faces Selling Pressure, But Signs of Weakening Bearish Momentum Emerge
Ethereum continues to grapple with downward pressure on higher timeframes, though recent price action suggests that bearish momentum may be losing steam. While the overarching trend remains decidedly negative, current movements indicate that sellers could be nearing exhaustion after weeks of consistent declines.
Demand Zone Holds Firm
Ethereum’s recent retreat from the $1.72K-$1.78K supply zone initiated another downward move, pushing the cryptocurrency back into the critical $1.46K-$1.53K demand region. This area has repeatedly served as support throughout June and continues to attract buyers whenever the price approaches it.
Bullish Divergence on Daily Chart
A significant development on the daily timeframe is the emergence of bullish divergence on the Relative Strength Index (RSI). While Ethereum has consistently made lower lows during June, the RSI has been forming higher lows near oversold territory. This divergence signals a weakening of downside momentum, even as ETH hovers near cycle lows.
Although a bullish divergence alone does not guarantee a reversal, it often appears in the later stages of bearish trends and can serve as an early indicator that sellers are losing control. As long as ETH maintains its position above the $1.46K-$1.53K support area, the divergence remains valid, increasing the likelihood of a relief rally.
Confirmation of a potential reversal would necessitate a break above key resistance zones, particularly the $1.72K-$1.78K supply area. Until then, the broader trend remains bearish, despite the improving momentum indicators.
Consolidation and Trendline Resistance
On the 4-hour timeframe, Ethereum has spent recent sessions consolidating above the lower demand zone following a sharp sell-off from resistance. A descending trendline has capped every recovery attempt since the rejection on June 22. However, the asset is now compressing directly beneath this trendline, with contracting volatility. This setup presents the possibility of a short-term breakout if buyers can overcome the trendline resistance.
A successful breakout could target the $1.72K-$1.78K supply zone, which was the origin of the latest decline. Such a move would align with the bullish RSI divergence observed on the daily chart and could signal the first meaningful recovery rally in several weeks.
On the downside, the $1.52K area remains a critical level to monitor. A loss of this support would invalidate the short-term bullish outlook and shift focus back toward further downside continuation within the broader downtrend. For now, Ethereum appears caught between support and descending resistance, with the next directional move likely determined by which side breaks first.
Liquidity Heatmap Reveals Potential Upside Sweep
The liquidation heatmap indicates an interesting shift in liquidity positioning. While liquidity remains concentrated above the current price, particularly between approximately $1.68K and $1.80K, Ethereum is currently trading below these significant clusters. Markets often gravitate toward areas with substantial leveraged positions, making these overhead liquidity pools attractive short-term targets.
This scenario suggests that ETH could stage an upside liquidity sweep before any larger directional move develops. A breakout above the 4-hour descending trendline would increase the probability of price moving into these overhead liquidity pockets, triggering short liquidations and fueling a squeeze toward the $1.7K-$1.8K region.
Simultaneously, the heatmap also shows notable liquidity beneath the market around the lower support region, indicating that both sides of the current range remain vulnerable to liquidation-driven volatility.
Combined with the bullish daily RSI divergence and the compression beneath the 4-hour trendline resistance, the current setup suggests Ethereum may first attempt an upside liquidity grab before the market determines whether a more sustainable recovery can materialize. The reaction around the $1.72K-$1.80K liquidity cluster will likely offer crucial insights into Ethereum’s next major trend.
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