According to CryptoPotato, Ethereum's price is currently attempting to break through a significant level. If successful, the recent downturn could finally be reversed. The daily chart shows that the Ethereum price has been on a downward trend since it was rejected from the $4,000 resistance level in May. The market has since fallen below the $3,500 level, but it is currently testing it from below. If the price can reclaim this level, the cryptocurrency could potentially rally to values above $4,000.
However, if the price is rejected and also loses the long-term bullish trendline and the 200-day moving average around the $3,000 level, the situation could worsen for Ethereum. On the 4-hour timeframe, there are early signs of a bullish reversal. The price has just broken above the large descending channel pattern, but it is currently struggling to break through the $3,500 resistance level. The Relative Strength Index (RSI) indicates that the momentum is bullish, suggesting the market might be able to break higher and begin the next upward move. This scenario would fail if the price drops back inside the channel.
In addition to the technical analysis, it is beneficial to examine the futures market sentiment metrics. The funding rates metric, a key sentiment parameter, shows whether buyers or sellers are executing their futures orders more aggressively. The funding rates have been gradually decreasing since the first price rejection from the $4,000 level in March. The current funding rate values suggest that the futures market is no longer overheated, and the price could finally begin another sustainable rally higher.