Ethereum is currently testing the crucial $2,400 resistance level after a 3.5% bounce to $2,393 on May 4, though it has since settled near $2,370. Over the past month, the cryptocurrency briefly breached this mark twice but failed to hold. Now, a combination of technical and on-chain indicators suggests a more sustained breakout may be imminent.
On the daily chart, a bullish MACD crossover is forming, a pattern that historically preceded a 25% rally in Ethereum. The last such crossover led to a significant upward move within 30 days. Additionally, the Supertrend indicator has remained green since mid-March, confirming that the broader trend is still bullish despite recent price swings.
Ethereum is currently trading near the 61.8% Fibonacci retracement level at $2,381, indicating strong buying interest. If bulls can push past the $2,400 resistance, the next target is the 38.2% Fib level at $2,772, provided momentum continues.
Fundamentally, demand appears to be strengthening. Spot Ethereum ETFs saw over $100 million in net inflows on Friday, ending a four-day outflow streak of $183 million. While this does not guarantee immediate institutional buying, it signals renewed interest. Furthermore, Ethereum exchange reserves have dropped to 14.5 million ETH, the lowest since 2016, suggesting reduced selling pressure and potential supply constraints.
With technicals painting a bullish picture and on-chain data showing improving fundamentals, Ethereum may finally break free from its narrow trading range. Traders will watch closely to see if the $2,400 level can be decisively conquered.