Ethereum is displaying bullish signs as it maintains its position above the $3,440 support zone. In comparison to Bitcoin, ETH is outperforming and is likely to continue its upward trend above $3,800.
Earlier this month, Ethereum faced challenges in surpassing the resistance levels at $3,950 and $4,000, resulting in a pullback similar to Bitcoin. As a consequence, ETH dropped from its swing high of $3,973 and fell below the $3,800 support zone.
The price even dipped below the 23.6% Fib retracement level of the upward wave from the $2,860 swing low to the $3,973 high. However, the bulls remained active near the 50-day simple moving average (blue), leading to a strong bullish reaction. The price recovered and surpassed the $3,550 resistance level.
A shooting star pattern formed near $3,440, but the price managed to recover some losses. Currently, it is showing positive signs and indicating the possibility of further gains. The immediate resistance is at the $3,640 level, followed by a major resistance at $3,700.
The daily chart also reveals the formation of a bullish flag pattern with resistance at $3,720. A break above this flag resistance could lead to a move towards $3,800. If the bulls successfully push the price above the $3,800 resistance, it may reach the main hurdle at $4,000. A close above $4,000 could trigger another increase, potentially pushing the price towards the $4,250 resistance. Further gains may even drive Ether towards the $5,000 zone in the near future.
However, if Ethereum struggles to rise above the $3,700 and $3,720 resistance levels, it could resume its downward slide. The first major support level is at $3,420, coinciding with the 50-day simple moving average (blue). A daily close below this support zone may indicate the risk of a larger pullback, with the price potentially testing the $3,285 level. The next significant support is near $3,120, and further losses could lead Ether towards the $2,860 support level.
Overall, Ethereum is currently maintaining its gains above $3,420, and a clear break above the $3,720 resistance level could pave the way for a fresh surge in the near future.