Ethereum Price Breaks Trendline

Ethereum's price broke out of a descending trendline that had capped it since the all-time high, with a 5.2% gain in the last 24 hours, trading near $1,928 [1]. The move is significant as it comes with a surge in futures open interest, which climbed to $19.8 billion, the highest reading since June 3, indicating new capital is entering the market [1].

What drove the move

The breakout was driven by a surge in futures open interest, which suggests that traders are returning to Ethereum derivatives with conviction [1]. The metric had collapsed to approximately $15.5 billion in late June, but its sharp recovery indicates that new capital is entering the market [1]. Additionally, the composition of recent liquidations strengthens the bullish case, with Ethereum futures long liquidations dominance falling to 4%, its lowest level in a year [1]. This suggests that short traders are being forced out as the price pushes higher.

The Ethereum price also holds the trendline from the 2022 bottom, with a bounce occurring inside a long-term green demand zone that has served as support four times since early 2023 [1]. The area coincides with the 0.786 Fibonacci retracement of the entire cycle at $1,754, making it a structural line in the sand [1]. The next major resistance sits far above, at the 0.618 Fibonacci retracement of $2,438 [1].

The competitive picture

In contrast, Bitcoin's price has been struggling, with a 2.89% decline in the week, closing at $61,749 [2]. The broader crypto market is also down, with the total crypto market cap excluding BTC and ETH shedding 30% since January [2]. However, some analysts see a potential bullish case for Bitcoin, with spot Bitcoin ETFs snapping a 10-day, $2.7 billion outflow streak with a $221.7 million single-day inflow on July 2 [2].

What to watch

• A confirmed daily close above the $1,900-$2,000 resistance zone on rising volume
• The $1,754 critical support level, which could expose the trendline near $1,600 if lost
• The upcoming days and weeks for Ethereum's weekly death cross, which could define positions for long-term trades if it extends

The real significance of Ethereum's breakout lies in its ability to sustain the move, with volume lacking confirmation, and the potential for a short squeeze, which could exaggerate upside moves [1]. The open question remains whether the new positioning will be short-lived or if the bullish momentum will continue.