Ethereum has been in a prolonged downtrend, with its price struggling to make significant gains. For nearly two weeks, ETH has been hovering within the $2,550 to $2,730 range. This range-bound movement suggests that the market is currently in a consolidation phase, which often precedes a significant price shift.

Recent findings indicate that Ethereum users are increasingly opting for private transactions that consume more gas. This shift has added volatility to Ethereum’s base fee, potentially creating challenges for network users and adding complexity to the market dynamics.

Accumulation Phase or Pre-Bullish Expansion?

The daily chart for Ethereum shows a market structure that is still predominantly bearish. However, the price has been constrained around $2,600, which might set the stage for a potential upward movement. The recent slump in early August has left some imbalances on the chart, which could signal a forthcoming bullish expansion.

Despite the possibility of an upward move, even if Ethereum reaches $3,000, it may not be sufficient to initiate a sustained breakout. The Accumulation/Distribution (A/D) indicator reveals that bulls have been relatively indifferent during the recent consolidation. This lack of enthusiasm from the bullish side suggests that any upward move might be driven more by liquidity rather than genuine demand, which could lead to a subsequent reversal.

Short-Term Price Prediction and Market Sentiment

Recent data on Ethereum’s Open Interest and funding rates provides further insight into market sentiment. Since August 18th, the Open Interest behind Ethereum has fluctuated alongside its price, indicating a lack of strong conviction in the futures market. Although the funding rate has shifted from negative to positive, signaling that speculators are going long, this change alone does not present a strong bullish signal.

The decline in the spot Cumulative Volume Delta (CVD) further reinforces a bearish short-term outlook. A declining CVD suggests a weakening demand for Ethereum, which could impact its price movement.

Key Price Targets and Liquidation Heatmap

The liquidation heatmap has highlighted $2,700 and $2,500 as significant short-term price targets for Ethereum. As it stands, a move toward the $2,700 mark appears likely in the near future. This target is seen as a key resistance level, and Ethereum’s ability to break through this zone could determine the next phase of its price action.

If Ethereum manages to push past $2,700, a further rally toward $2,850 is possible. However, such a move would likely be driven by liquidity rather than solid demand. Therefore, traders should remain cautious and consider opportunities to sell the bounce rather than entering new positions near the $2,900 to $3,000 resistance zone.

Conclusion

Ethereum’s price is at a critical juncture, with the potential to either break through the $2,700 resistance level or face a reversal. The current market indicators suggest a bullish short-term outlook, but the lack of strong demand and the potential for liquidity-driven movements mean that traders should proceed with caution. Monitoring key resistance levels and adjusting strategies based on evolving market conditions will be crucial for navigating Ethereum’s price movements in the coming days.