• Ethereum price continues to hold support against the $2,500 level.
• Two upcoming primary resistance levels may halt the current rally.
• The downward pressure remains, but its severity is diminishing.

Ethereum price continues to rise, extending the current rally to nine days and a nearly 30% gain from the January 24 lows. However, short-term resistance could end the current rally.

Ethereum price is facing a combination of Fibonacci and Ichimoku resistance levels

Ethereum price is currently testing daily Kijun-Sen ($2,790) as its main short-term resistance. Yesterday’s close was just above this level, and it was the first test of the Kijun-Sen as resistance since January 5 and only the second test since the Ichimoku Ideal Bearish Breakout that occurred. on December 27, 2021.

The two red arrows in the chart image below show a downward pointing arrow on the candlestick chart and an upward pointing arrow on the composite index. These arrows highlight a gap between the price chart and the oscillator: the price action has lower highs, but the oscillator has higher highs. This is a condition known as a hidden bearish divergence.

Hidden bearish divergence is only valid if an instrument is in a larger downtrend – which is Ethereum price. The hidden bearish divergence is a warning sign that the pullback to the upside is likely to reverse, with the price action continuing its prior downtrend. The likelihood of this divergence working in favor of the bears increases if it appears while the price is against a strong resistance zone.

Even if Ethereum price were to move above and close above the Kijun-Sen, the 50% Fibonacci retracement would likely act as a source of resistance. However, the 50% Fibonacci retracement could be a red herring for short sellers. The volume profile in 2021 and 2022 shows that the $2,900 value zone is extremely thin. In other words, Ethereum price should be able to easily break through and break above the $2,900 area. If that happens, the road to testing $3,500 is wide open.

Daily chart ETH/USD Ichimoku Kinko Hyo

Downside risks remain but would require significant selling pressure. However, significant support exists at $2,500 where the daily Tenkan-Sen retracement and 61.8% Fibonacci exist.

A close below $2,500 would invalidate any short-term bullish outlook and likely trigger a move to test the $1,800 value zone.