Ethereum Eyes Key Trendline Break as Chart Points to $2.2K Liquidity Zone

Ethereum has climbed for several consecutive sessions and is now pressing against a key resistance confluence that traders say could decide whether the recovery becomes a genuine trend reversal or fades into another leg of the broader downtrend, according to a technical analysis published by CryptoPotato.

The report, authored by analyst Shayan Markets, notes that ETH bounced from a demand zone between $1.46,000 and $1.53,000 after buyers defended the June lows, and has since reclaimed the $1.70,000 area. That puts the asset just below a resistance cluster spanning $1.82,000 to $1.86,000, which coincides with a long-term descending trendline that has capped every major rally since Ethereum’s May peak.

Momentum improves, but trend remains unconfirmed

According to the analysis, momentum indicators have strengthened alongside the price recovery. The RSI has continued to print higher highs even as price rebounded sharply from support, a pattern the report describes as a bullish divergence that suggests selling pressure has eased compared with previous downswings.

Still, the broader structure is not considered bullish until Ethereum clears the descending trendline and pushes through the higher resistance band. A rejection at this level, the report warns, would preserve the sequence of lower highs that has characterized the market for months.

On the four-hour chart, ETH has broken above its recent consolidation range and reached an initial resistance zone between $1.70,000 and $1.74,000, trading just beneath the same falling trendline that has repeatedly stalled earlier recovery attempts. As long as price holds above the reclaimed $1.70,000 level, buyers are seen as retaining short-term control; a failure to break the trendline could send price back toward lower support and extend the corrective pattern, the analysis notes.

Liquidity clusters near $2K-$2.2K in focus

A one-month liquidation heatmap cited in the report shows a heavy concentration of leveraged short positions sitting between $2,000 and $2,200, well above current prices. CryptoPotato’s analysis suggests these overhead liquidity pools could act as a magnet if Ethereum clears the descending trendline, with short liquidations potentially adding fuel to further upside.

However, the report cautions that the market’s behavior after sweeping that liquidity may matter more than the move itself. Once the $2,000-$2,200 zone is absorbed, price action should reveal whether buyers have enough conviction to build a sustainable uptrend or whether the rally was mainly a liquidity-driven squeeze.

If bullish momentum persists after clearing that overhead liquidity, the analysis suggests Ethereum could move into a broader recovery phase. Conversely, a failure to hold the region would raise the odds of another decline, with price potentially rotating down toward large liquidity pools that remain below the current market — a pattern the report frames as typical of how price tends to move between major leverage clusters before settling on its next direction.

Read more: Bitcoin Steadies Near $62K, but CoinShares Says This Is Only Early-Stage Bottoming