Ethereum is attempting to recover after defending the $1.5K region once more, but the broader trend remains under pressure. The price is now approaching a major confluence resistance area that could determine whether this rebound develops into a larger trend reversal or remains another relief rally within the prevailing downtrend.

Ethereum Price Analysis: The Daily Chart

The daily chart continues to reflect a bearish market structure. ETH remains below the descending long-term trendline, as well as the 100-day and 200-day moving averages, all of which continue to slope lower. This alignment suggests sellers still maintain control from a broader perspective.

Following the sharp decline into the $1.5K support zone, buyers managed to trigger a recovery toward the $1.8K resistance area. This level coincides with the previous horizontal support that has now turned into resistance and sits just beneath the descending channel trendline, creating a significant supply zone.

A successful daily close above the trendline and the $1.8K region would be the first meaningful technical improvement and could expose the next resistance around $2K to $2.2K, where another major supply zone and moving average cluster await.

Failure to reclaim the current resistance would likely reinforce the broader bearish structure and increase the probability of another move toward the $1.5K support. Losing that area would pave the way toward the channel’s lower boundary below $1.2K.

ETH/USDT 4-Hour Chart

On the 4-hour timeframe, Ethereum has produced a stronger short-term recovery after defending the $1.5K demand zone for a second time. The rebound has carried the price back toward the upper boundary of the pattern that has entrapped the price since early June.

ETH is now testing the $1.75K to $1.8K resistance while simultaneously confronting the descending trendline. This makes the current area particularly important for short-term direction.

A confirmed breakout above both the trendline and horizontal resistance would invalidate the sequence of lower highs and could accelerate buying toward the $larger $2K to $2.2K supply zone also visible on the daily timeframe. On the other hand, rejection from this region would preserve the existing bearish structure. In that case, the first support remains around $1.7K, followed by the $1.6K area, while the key demand zone continues to sit near $1.5K.

Momentum has also improved considerably during the latest advance, with the RSI climbing toward overbought territory. While this reflects strengthening buying pressure, it also suggests that bulls may need a period of consolidation before attempting a decisive breakout.

On-Chain Analysis

The exchange reserve chart presents one of the more constructive long-term signals for Ethereum. Exchange balances have fallen significantly from above 21M ETH to roughly 15.5M ETH, marking a persistent multi-year decline in the amount of ETH held on centralized exchanges.

This trend generally indicates continued coin withdrawals into self-custody or long-term storage, reducing the immediately available supply for sale. Such behavior often reflects improving investor conviction and tends to provide a favorable backdrop during periods of sustained demand.

Despite Ethereum’s prolonged price correction from the 2025 highs, exchange reserves have continued to decline rather than rise, suggesting that long-term holders have not been aggressively distributing their holdings into weakness.

While on-chain data alone does not guarantee an immediate rally, the persistent reduction in exchange reserves supports the view that selling pressure from spot holders remains relatively limited. If ETH can reclaim the major technical resistance around $2K and attract renewed demand, this tightening exchange supply could become an important tailwind for a stronger medium-term recovery.

Source: CryptoPotato