Ethereum (ETH) has shifted into recovery mode. After defending the critical $2,850 support area, the second-largest cryptocurrency staged a sharp intraday reversal, piercing through resistance levels at $2,880 and $2,950 before reclaiming the $3,000 mark. With ETH now trading firmly above its 100-hour Simple Moving Average (SMA), market participants are assessing whether this move represents a fleeting short squeeze or the early stages of a sustained leg higher.

Bulls Defend Key Support, Eyeing Continuation

Crucially, Ethereum avoided a breakdown below $2,850. Buyers stepped in aggressively above this level, validating a rising trendline that currently anchors support near $2,880 on the hourly ETH/USD chart (Kraken). This defense triggered a recovery wave that cleared intermediate resistance at $2,950, forcing short-term bears to cover their positions.

The rebound has effectively neutralized the recent downtrend. ETH has pushed beyond the 61.8% Fibonacci retracement level of the drop from the $3,165 swing high to the $2,620 low—a technical development that often signals strength. More importantly, the market has flipped the $3,000 psychological level from resistance back into immediate support.

Currently, Ethereum is trading above both the $3,000 handle and the 100-hour SMA, having cleared the 76.4% Fib retracement of the $3,165–$2,620 move. On the hourly timeframe, the correction has been largely retraced. The onus is now on bulls to convert the overhead resistance band into a launchpad rather than facing another rejection.

If upward momentum persists, the first major test lies near $3,120. Immediate resistance stacks up above this level at $3,150, followed by the prior swing high of $3,165. A clean breakout above $3,165—characterized by a solid close rather than a mere wick—would invalidate the bearish thesis and shift focus toward fresh upside targets.

Ethereum Price

In a breakout scenario, the next objective sits at $3,220. Should momentum hold, bulls will likely target the broader supply zone between $3,320 and $3,350, where profit-taking from early entrants around $2,800 may intensify.

Downside Risks and Key Levels

Conversely, the bullish outlook depends on clearing overhead hurdles. If Ethereum stalls below the $3,150 region, the risk of a pullback remains elevated.

On the downside, initial support is located at $2,980. A failure to hold this level would shift attention to the pivotal $2,920 zone. A sustained break below $2,920 would suggest the recent rally is exhausted, potentially sending price drifting back toward $2,840. At that juncture, dip-buyers would face a critical decision; failure to defend $2,840 could expose the deeper support band around $2,740–$2,750.

For now, technical indicators favor the upside:

Hourly MACD: The indicator is gaining traction in the bullish zone, suggesting that upward momentum is accelerating.

Hourly RSI: The Relative Strength Index is holding above 50, indicating that buyers currently control the intraday trend.

As long as ETH maintains its footing above the rising trendline near $2,880 and the 100-hour SMA, pullbacks are likely to be viewed as buying opportunities. However, a close back below the high-$2,000s would characterize this move as a range-bound squeeze rather than a definitive breakout.$ETH ‌