Ethereum has been showing signs of cooling down after its strong rally earlier this month. The second-largest cryptocurrency hit a local high near $4,957, but has since struggled to hold momentum. At the time of writing, ETH is hovering just above $4,600, with traders watching closely to see whether the next move will bring another breakout or a deeper pullback.
What you'll learn 👉
Ethereum Price Action and Key Levels
ETH has been trading in a narrow range between $4,520 and $4,720 over the past few sessions. The structure is still leaning bullish, with higher lows forming compared to mid-August, but the failed push toward $4,950 shows resistance is proving tough to crack.
On the downside, immediate support lies at $4,520–$4,550. A clean break below could drag ETH back toward $4,400–$4,420, with further downside risk to $4,300–$4,320 if selling accelerates. On the upside, reclaiming $4,720 would open the door toward $4,850–$4,900, with the potential for another retest of the $4,950 zone.
Open Interest and Leverage Cooling Off
Open interest (OI) climbed steadily into mid-August but has now pulled back toward 2.07M, indicaing that leverage is leaving the market. This type of de-risking often happens before a stronger directional move. With traders stepping to the sidelines, Ethereum could be coiling up for its next leg.
Longs vs Shorts – Market Positioning
The data shows net longs have been trimming, slipping to around -3.6M, while net shorts have been building steadily to more than 4.0M. That tells us traders are leaning bearish and shorting ETH into rallies. However, this also creates the potential for a short squeeze if Ethereum pushes back above resistance, as shorts could be forced to cover quickly.
Volume spiked during the push toward $4,950, but has since cooled off. This suggests buyers are no longer chasing aggressively, but there’s also no sign of heavy distribution yet. Instead, Ethereum looks like it’s in consolidation mode.
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Short-Term Outlook
For the next 24–48 hours, Ethereum is likely to remain inside its $4,520–$4,720 range. Traders should watch for a decisive move outside this band:
- Bullish scenario: A breakout above $4,720 could fuel a run toward $4,850–$4,900, with a chance of retesting the $4,950 peak.
- Bearish scenario: A breakdown under $4,520 would put $4,400 back in play, with further downside risk if that level doesn’t hold.
Conclusion
Ethereum’s rally has slowed, but the market still looks healthy. With shorts piling in and leverage cooling down, a breakout above resistance could move fast. For now, though, ETH remains trapped in its range, and traders should be ready for volatility once it breaks.
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