Ethereum bulls defend key $3k support after breakout from downtrend

Source: Cryptonews Original Title: Ethereum bulls defend key $3k support after breakout from downtrend Original Link: Ethereum (ETH) maintained its position above a key support level, demonstrating technical breakouts and on-chain strength, according to market analysis. The development occurred as Bitcoin (BTC) captured market attention due to macroeconomic and geopolitical events, including rising tensions in the Middle East and financial instability across emerging markets.

Ethereum breaks out holds at $3.1k

Technical analysis shows Ethereum broke out of a descending parallel channel on the daily chart, converting the resistance zone into support. The cryptocurrency recently reached a major resistance zone before encountering selling pressure, resulting in consecutive bearish candles, according to chart data. This zone overlaps with longer-term moving averages, creating a technical barrier.

The Relative Strength Index (RSI) remains in neutral territory, pulling back from overbought levels, according to technical indicators. The daily trendline remains intact, and the bullish outlook persists if the price maintains structure above the lower support zone, analysts noted. Reclaiming the higher resistance level has become critical to invalidate the local top.

On shorter timeframes, Ethereum is consolidating above the previous breakout zone, forming a base after an impulsive rally last week, according to chart patterns. The asset is respecting the support level, while an upper descending trendline capped the last move. The current range is functioning as a mid-range value area and decision zone.

If buyers push through the nearby resistance level, the move could open the door for a retest of higher resistance and a potential breakout toward higher targets, according to technical analysis. However, if the price falls below support with volume, the market could revisit the lower boundary of the pattern and a high-confluence demand area.

Ethereum’s 30-day simple moving average of active addresses is trending higher following a significant decline in the third and fourth quarters of 2024, according to on-chain data. Active addresses are hovering above 400,000, mirroring levels seen during the last major uptrend.

The uptick suggests improving network fundamentals, potentially driven by increased decentralized finance (DeFi) activity and restaking flows, according to blockchain metrics. Historically, rising address activity has often preceded or coincided with sustainable price rallies, data shows. Continued on-chain momentum and increased active addresses would provide confirmation of sustained demand, reinforcing Ethereum’s medium-term outlook, analysts stated.