Ethereum rebounds, but huge resistance looms

Ethereum rebounded, but massive resistance looms

Key Points

Prices hit the level of horizontal resistance expected in previous analysis.

The more severe test is around $1,950.

The number of Ethereum wallets has exceeded 200 million.

Central bank decisions may break the current pattern.

Retest depends on today's close

To improve its current trend, Ethereum needs to stand firm above horizontal resistance and the Fibonacci level below it at the close of the session. A closing above that resistance level would indicate buyers have absorbed the supply that has accumulated here since mid-July and confirm that Tuesday's defense of $1,870 was not just a short-lived response, but a more lasting support.

Ethereum/Dollar Daily Technical Chart and Market Indicators.

If prices fall below resistance at the close but remain above $1,870, the current trend will remain in the balance. A break below the Fibonacci level would significantly weaken this pattern and reopen room for movement towards $1,800.

The daily RSI is located near 57, above its signal line. The momentum has improved, but it is far from overbought territory, leaving room for further gains after the signal is confirmed.

Stronger resistance is at US$1,950

After clearing the current resistance level, the next test will come into view. The $1,950 area combines a second horizontal resistance level with a 100-day simple moving average. This level of resistance reflects supply pressure in previous transactions, while the moving average is a widely watched indicator of medium-term trend.

This overlap makes the region more substantial than any individual component. Buyers need to absorb existing sell orders while pushing Ethereum back above the moving average that has suppressed it throughout the recovery.

A brief breakthrough of US$1,950 in the day would be encouraging. A close above that level and maintain it until the next trading session would provide stronger evidence that this was more than just a soothing rally.

The June channel forms another barrier with $2,000.

Above $1,950, attention will turn to the 0.5 Fibonacci retracement level of $1,985, which is also the lower boundary of Ethereum's June rising channel. This channel provided support during Ethereum's early recovery until prices fell below the channel on July 23. Previous support levels approaching from below tend to attract sellers.

The psychological barrier of $2,000 is immediately above it, further concentrating resistance in the $1,985 to $2,000 range. It was from this region that Ethereum began to fall more broadly towards $1,500 on June 2. Traders who bought before previous declines may view touching the area again as an opportunity to reduce exposure, adding supply to already evident resistance areas. It is extremely difficult to break through the entire range at one time. Even after successfully breaking through $1,950, a pause or rejection around $2,000 is in line with the market pattern.

Wallet growth helps support long-term prospects

Defense of $1,870 comes against the backdrop of the continued expansion of the Ethereum holder base. Sanitation data shows that in the past two weeks, the number of non-empty wallets on the Ethereum network exceeded 200 million for the first time.

Sanitation charts track holder milestones for Ethereum, XRP Ledger, USD Coin and Chainlink.

This number covers addresses rather than individuals, as an individual, exchange or institution may control multiple addresses. But it does suggest that even after the recent decline, there are still more wallets holding ETH balances. The growing address base of holding balances helps the market absorb supply during the pullback. The data itself does not prove that the wallets were bought at $1,870, but it provides a structural reason why selling near Fibonacci levels encountered demand rather than triggered a sustained decline.

Holder growth in itself does not constitute a breakthrough signal. Its correlation will only increase when Ethereum converts current resistance into support and subsequently challenges $1,950.

Macro Risk Day

Ethereum's technical test coincides with a series of intensive central bank events. The Fed's decision will be announced on July 29. The market generally expects interest rates to remain unchanged, and this expectation has been largely digested, making the market sensitive to the language accompanying the guidance. Hawkish rhetoric could push up U.S. dollar and bond yields, weaken demand for risky assets and cause any attempt to break $1,950 to fail. Market attention will then turn to the Bank of Japan on Thursday and Friday. As an analysis of the impact of Japan's interest rate path on the crypto market explains, any signal of accelerated tightening could push the yen higher and put pressure on carry trades that fund positions in stocks and digital assets. Friday's U.S. economic data will end the week. A favorable macro response would provide buyers with a better opportunity to break through $1,950 and test the $1,985 to $2,000 area, while hawkish surprises could undermine an otherwise good technical breakthrough.

Current key prices

Ethereum is currently below its 100-day and 200-day moving averages, so the current rise remains a recovery in a broader weak structure.

Upside scenario: Closing above current resistance and remaining above $1,870, a test of $1,950 was opened. Clearing the 100-day moving average from there would expose the $1,985 to $2,000 range, where the June channel meets the psychological barrier.

Rejection scenario: Failure at current resistance levels will put $1,870 back under pressure. Losing that level would put $1,800 in sight. The chart pattern is only likely to shift when buyers regain $1,950 and prove they can hold on to the resistance group above it. Below this, all behavior is a range fluctuation in the downward trend, and three central bank events in the next three days may determine its direction.