Ethereum price reclaimed the $1,850 resistance after lower-than-expected US inflation data triggered a sharp short squeeze, bringing the $2,000 level back into focus for traders.
summary
- The price of Ethereum crossed the $1,850 level after weak US CPI data sparked a broad rally in the cryptocurrency.
- Technical charts and filter sets suggest that the $2,000 level is the next major price target.
- Analysts say that keeping $1,850 as support is key to sustaining the current uptrend.
The second-largest cryptocurrency rose nearly 5% on July 15 following the June CPI Came below expectationsThis eased fears that Federal Reserve Chairman Kevin Warsh would resume raising interest rates aggressively. Risk assets rose in global markets, with technology stocks advancing alongside cryptocurrencies as investors priced in more favorable policy expectations.
Financial derivatives markets reinforced this move. CoinGlass liquidation data shows that a dense pool of leveraged short positions between $1,800 and $1,850 were erased as Ethereum broke through resistance. Forced buybacks have accelerated the rally towards $1,900, while the latest liquidation heat map now shows new pockets of liquidity centered around $1,900-$1,950.
A successful advance through that area could reveal another wave of liquidations and open the way towards the psychological level of $2,000.
Technical breakout puts $2,000 back in play
Ethereum’s daily chart shows that the recovery has developed from a series of round-bottom formations that formed after the June sell-off to near $1,500. The price has now completed a break above the neckline near $1,850, a level that has capped several recovery attempts over recent weeks. The movement measured by the pattern indicates a target near $2,190, which corresponds to the key resistance area from earlier this year.
Momentum indicators continue to favor buyers. The Aroon Up indicator stands above the 92 level while the Aroon Down indicator has fallen to zero, indicating that the bulls maintain control of the prevailing trend. The RSI has risen to around 63, leaving room for additional gains before reaching the overbought zone.
The 4-hour chart supports the bullish structure. Ethereum has reclaimed the 100% Fibonacci retracement level near the USD 1,897 area after settling above the 78.6% retracement levels near the USD 1,815 area. The MACD remains in positive territory as bullish momentum expands, while a Chaikin Money Flow reading above zero indicates capital continuing to enter the market rather than exit it.
Comment Upon the hack, crypto analyst Daan Crypto Trades wrote on X:
“ETH has crossed the $1.8K level and has seen some good continuation so far. The market structure has flipped back to the upside in this time frame.”
He added that the next major resistance for the higher time frame is near the $2,100 area, with $1,800 remaining where support remains crucial for bullish momentum.
Another trader who follows closely, Ted Bellows, believes the next milestone could arrive quickly if buyers defend current levels. “$ETH has fully reclaimed the major resistance level. If Ethereum can hold above $1,850, a pump towards $2,000 will be next.”
Off the charts, Ethereum continues to benefit from tightening on-chain supply. A large proportion of Ethereum (ETH) in circulation remains tied to staking, limiting readily available exchange balances even as demand improves.
Meanwhile, regulatory progress surrounding US cryptocurrency legislation and the immediate adoption of ETFs has kept institutional interest intact after several weeks of macro volatility tied to tensions in the Middle East and government-related cryptocurrency transfers.
Missing the support at $1,850 would weaken the bullish case
Although the setup has improved, Ethereum still faces several hurdles before reclaiming $2,000. The liquidation heatmap shows highly leveraged positions between $1,900 and $1,950, where sellers may attempt to defend resistance. Failure to absorb this supply could trigger another round of profit-taking after the recent rally.
Overall risks also remain. Any return of inflation, renewed geopolitical tensions that push oil prices sharply higher, or unexpectedly hawkish comments from Federal Reserve officials could lead to a reversal in sentiment across risk assets.
From a technical perspective, a loss of the newly restored support at $1850 would negate the breakout and shift attention back towards $1815, followed by the stronger demand area around $1750. As long as Ethereum continues to record highs while defending the $1850 area, the possibility of a move towards $2000 and perhaps the $2100-2190 resistance area remains favorable.
Disclosure: This article does not constitute investment advice. The content and materials contained on this page are for educational purposes only.
