Back in May, we reported that the Ethereum network had successfully undergone a major upgrade named Pectra, which triggered a surge in demand for Ethereum and a confident upward movement in the ETH/USD rate (indicated by the arrow on the chart).
At the time, we also suggested that the $1,800 to $2,300 range could be considered a broad bullish Fair Value Gap, meaning it could act as a support zone for ETH/USD in the event of a pullback.
Indeed, the price did retreat into the $1,800–$2,300 zone, with the B→C correction forming a textbook 50% retracement of the A→B impulse. After a brief consolidation, the upward trend resumed. Bullish sentiment was further supported by regulatory improvements in the US, particularly the passing of legislation on stablecoins, which fostered a more favourable environment for the development of new projects on the Ethereum blockchain.
These and other fundamental drivers contributed to a more than 50% increase in ETH/USD throughout July.
Technical Analysis of the ETH/USD Chart
Since April, ETH/USD price movements have been forming an ascending channel (highlighted in blue), with the price entering the upper half of the channel by mid-July. This move was accompanied by the formation of new highs without significant pullbacks—an indication of strong demand.
Given the inherent inertia of financial markets, it is difficult to imagine a sharp reversal from a bullish to a bearish trend. However, there are reasons to believe that the steep upward movement in ETH’s price may slow in the near term:
→ the price is approaching the upper boundary of the channel, which typically acts as resistance;
→ the RSI indicator has remained in overbought territory for several days;
→ the psychologically significant $4,000 level may also act as resistance, as it has on previous occasions (e.g., in December 2024).
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