Will Ethereum’s $1,825 Support Ignite a Surge to $2,500?

Ethereum valuation

Ethereum valuation initiated a recuperation wave from $1,750 but encounters resistance at $1,920
ETH continues to trade beneath $2,000 and the 100-hourly Simple Moving Average
US Congress passed legislation to abolish IRS crypto tax regulation, potentially favoring DeFi initiatives on Ethereum
Traders have established a significant support cluster at $1,825, with bulls utilizing $753 million in leverage
Technical indicators imply ETH in a downtrend but could surge towards $2,018 if the $1,825 support endures

Ethereum, the second-largest digital currency by market capitalization, has been grappling to uphold momentum above the $2,000 threshold despite some encouraging developments in the wider market. The digital asset has exhibited signs of restoration but continues to encounter obstacles on its upward journey.

ETH established a foundation above the $1,750 mark and commenced a restoration wave. This recuperative thrust enabled the price to surpass several resistance levels including $1,800 and $1,820.

The bulls succeeded in driving the price beyond the $1,880 mark. There was also a rise above the 23.6% Fibonacci retracement level from the downward movement between the $2,150 swing high and the $1,752 low.

Nevertheless, the bears appear to be active near the $1,920 resistance level. This level has proven to be a significant barrier for Ethereum to conquer in its recovery efforts.

Ethereum valuation is currently trading below $1,950 and the 100-hourly Simple Moving Average. On the upside, the price seems to be facing challenges near the $1,920 mark with a short-term bearish trend line forming.

The subsequent key resistance lies near the $1,950 level. This aligns with the 50% Fibonacci retracement level of the downward movement from the $2,150 swing high to the $1,752 low.

If Ethereum can navigate these challenges, the initial significant resistance will be around the $2,000 level. A break above this psychological threshold might propel the price toward the $2,060 resistance.

If the upward momentum persists, a break above $2,060 could lead to further gains. In such a scenario, Ether might surge towards the $2,120 resistance zone or even reach $2,250 in the near future.

On the downside, if Ethereum is unable to navigate the $1,920 resistance, it might commence another downturn. Initial support is located around the $1,850 level, with the first major support near the $1,800 zone.

A recent occurrence that could enhance Ethereum’s outlook is the US Congress’ vote to nullify an IRS rule. The regulation mandated decentralized finance brokers to report user transactions akin to traditional securities brokers.

The bill, championed by Rep. Mike Carey and Sen. Ted Cruz, obtained approval in the House after gaining momentum in the Senate. It currently proceeds to President Donald Trump’s desk for ultimate approval.

If ratified, this regulatory shift could cultivate a more advantageous environment for the cryptocurrency sector. It may augment the attractiveness of various DeFi services constructed on the Ethereum network, potentially escalating demand for ETH.

Potential Bullish Reversal?

Despite Ethereum’s ongoing difficulties below $2,000, derivatives market positions indicate traders are preparing for a bullish reversal. Data from Coinglass illustrates that bulls employed $753 million in leverage on ETH long positions, narrowly surpassing the $744 million leveraged on active short positions.

This rise in bullish speculation occurs even as ETH price has fallen 3% in the past 48 hours. Long leverage overshadowing shorts after an extended bearish spell is often an early indicator of a forthcoming bullish reversal.

Technical indicators on the daily chart disclose a consistent downtrend. The 5-day, 8-day, and 13-day Super SMAs continue to slope downward, reinforcing bearish dominance as Ethereum trades around $1,881.

The Bull-Bear Power indicator at -393.47 signifies acute selling pressure, affirming the persistent bearish trend. However, a potential bottoming-out situation could manifest if the $1,825 support level holds.

This $1,825 zone signifies the last significant accumulation area prior to the March rally effort. A rebound from this level might instigate a relief rally towards the $2,018 and $2,111 resistance zones, where prior price consolidations took place.

If leveraged longs continue to exceed shorts, Ethereum could experience short-covering momentum. This might hasten a recovery above $2,000 and sustain optimism for a $2,500 rebound in the upcoming weeks.