Ethereum in full retracement: Technical analysis of January 23, 2025

After climbing above the significant threshold of $4,100, Ethereum encountered increasing bearish pressure that led to a substantial decline in its price, which dropped by nearly 30%. This situation prompts a closer examination of Ethereum's future outlook.

Ethereum has recently experienced a remarkable price surge, achieving a 70% rise in just under two months. The price jumped from approximately $2,400 to peak at $4,100. However, this peak level acted as a substantial resistance point, ultimately resulting in a price correction that caused Ethereum to fall to around $2,900.

This level is important as it has established a solid support zone, enhanced by its alignment with several critical indicators. This support is reinforced by being near the first monthly pivot support level, the 200-day moving average, and the 61.8% Fibonacci retracement level of the recent rally.

Currently, Ethereum trades at about $3,200. This price point is within a significant volume zone, underlining the critical nature of maintaining stability above this figure. Though Ethereum is in a short-term downtrend, this pullback may simply represent a temporary setback within an overall bullish trend expected in the medium to long term.

On the momentum front, Ethereum has shown a downward revision, but a gradual stabilization is becoming evident. This hints at potential recovery in the near future.

The analysis of Ethereum's derivatives market, particularly regarding ETH/USDT perpetual contracts, shows that open interest fluctuates in response to the asset's price movements. This situation indicates a reactive market where the interests of speculators mirror the direction of prices.

Current data regarding cumulative volume delta (CVD) indicates a downward trend, reflecting a higher number of sell orders in the market. This situation contributes to the overall selling pressure observed. However, despite these bearish signs, the financing rate remains positive, suggesting persistent bullish sentiment among market participants.

Since the decline observed on January 19, liquidations in the market have remained limited. This reflects overall market stability, reduced volatility, and effective risk management practices, leading to a balanced environment between buyers and sellers.

The ETH/USDT heatmap reveals that Ethereum notably bounced off a crucial liquidation zone near $3,000, which likely triggered long orders based on the subsequent price reactions. Presently, the key levels to watch above the current price include $3,550, $3,780, and a significant resistance at $4,125. Conversely, important support levels below the current trading price can be found beneath $2,900, around $2,700, and near $2,500. Movement toward these lower levels could incite substantial order triggers, increasing the potential for volatility in Ethereum's price and thus becoming important points of interest for investors.

If Ethereum manages to maintain its price above $2,923, there is potential for a breakout toward $3,500. Achieving this level could lead to further targets of approximately $3,746 or even back to the $4,100 mark. If bullish momentum continues, prices could reach $4,500 or potentially even Ethereum's previous all-time high, representing a significant gain of around 53%.

If Ethereum cannot sustain above the critical support at $2,923, a pullback toward $2,700 or even $2,600 could occur, with the next crucial support lying just below $2,400. Further down, several additional support levels exist, starting with $2,300, signaling a possible drop of around 27%.

In conclusion, Ethereum is currently navigating a correction phase following a strong price rally. However, emerging signs of stabilization indicate the potential for recovery. While the short-term trend remains bearish, confirmation of key support levels could set the stage for a renewed upward movement in the near future.

---