Ethereum price has risen nearly 4% over the past seven days, showing new strength after months of pressure. This move stands out as ETH is still down around 33% over the past three months and the overall trend has been solidly bearish so far.
The recent rally has finally broken that bearish structure. However, as the trend reverses, new risks begin to surface that could determine whether this breakout persists or stalls. A 10% increase is required to debunk that risk.
Sponsored Sponsored
Ethereum breaks bearish structure, but momentum is not completely clean
Ethereum has been trading within a descending channel since early October, and this structure reflects a controlled bearish trend with each rally failing lower than the previous one. This week, price finally broke above the upper trend line, indicating that the bearish structure has broken.
This breakout didn’t happen by chance. From October 10th to December 18th, the Ethereum price hit a low and the Relative Strength Index (RSI) hit a low. RSI measures momentum. If prices are falling but the RSI is rising, it often indicates that selling pressure is easing. This bullish divergence helped trigger a trend reversal.
Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.
But the reversal is not without friction.
From December 10th to January 5th, Ethereum price has formed lower highs (still incomplete), while RSI has formed higher highs.
This creates a hidden bearish divergence, which typically indicates consolidation or a pullback rather than a complete trend failure. If the next candlestick forms below $3,220, the bearish pattern will be confirmed.
Sponsored Sponsored
This shows that Ethereum has reversed its bearish trend but has not yet reached its full strength.
Derivatives remain risky even if whales intervene
The greatest short-term rebound risk comes from derivative positioning.
In the Binance ETH/USDT liquidation map, the long liquidation leverage is close to $2.2 billion, while the short liquidation leverage is only about $303 million. Long exposures are more than 7 times as long as short exposures. When positioning becomes one-sided like this, even a slight pullback can trigger a forced sell.
Sponsored Sponsored
The thickest liquidation cluster shows long-term liquidations starting around $3,150 (current price) and descending towards $2,850 (visible on the price chart), which has acted as strong support since early December. A sharp move into this zone could trigger a cascade and drive Ethereum price lower.
However, the whales are leaning in the opposite direction, showing strength across the spot market.
Over the recent weekend alone, Ethereum whales increased their holdings from 101.31 million ETH to 101.63 million ETH, adding approximately 320,000 ETH. At current prices, that accumulation is worth about $1 billion. This suggests that large holders are not preparing to exit, but are positioning for upside.
Still, whale accumulation does not eliminate liquidation risk. It just offsets it.
Sponsored Sponsored
10% test to determine the next Ethereum price movement
Ethereum price level now matters more than the story.
Ethereum is currently trading within the same range of $3,220 to $2,850 that has defined its price movements since early December. As long as ETH remains within this band, liquidation risk will remain high.
Exceeding $3,470 will be important. This level would represent an increase of around 10% from current prices and would negate any hidden bearish divergence by pushing prices higher. Resolving this would move Ethereum away from the densest long-term liquidity cluster.
If this happens, Ethereum could open the door to $3,910 and, if it gains momentum, $4,250. On the downside, a loss of $2,850 would weaken the reversal theory and expose ETH to serious downside risk once again.
Ethereum price has broken the bearish trend, but the breakout is still vulnerable. A 10% increase can be the difference between a solid reversal and another painful reset.
