Ethereum experienced a surge this week, briefly breaking above a key resistance region. However, it lacked sufficient momentum, appearing to be a false breakout.

If ETH faces a more profound rejection at current levels, lower prices could follow.

Technical Analysis

By Shayan

The Daily Chart

Ethereum saw a strong push from buyers at the $3K support range, driving the price slightly above a substantial resistance region. This key region includes:

• The 100-day moving average at $3.3K
• The bullish flag’s upper boundary at $3.4K

Despite clearing these levels, ETH encountered significant selling pressure at $3.5K, highlighting insufficient buying power. This false breakout raises concerns about a potential rejection.

Continuing the bullish trend will be possible if the asset successfully breaks above these key thresholds and ultimately reclaims the $3.5K juncture. Otherwise, a rejection could lead to heightened volatility and a potential price drop.

The 4-Hour Chart

On the lower timeframe, ETH gained momentum after bouncing from the 0.5-0.618 Fibonacci retracement zone, successfully breaking above a descending wedge pattern. Such a breakout often signals a potential bullish continuation, shifting sentiment in favor of buyers.

However, upon reaching the critical $3,5K resistance, Ethereum encountered significant selling pressure, triggering a retracement toward the previously broken trendline of the wedge.

The upcoming price action will be crucial; if Ethereum finds support at this trendline and completes a pullback, the bullish structure could remain intact, leading to another push toward $3.5K. Conversely, if demand remains weak and buyers fail to step in, the market could face a deeper correction, potentially targeting the $3K support level again.

Onchain Analysis

By Shayan

The Binance liquidation heatmap offers valuable insights into areas where substantial liquidation events are likely to occur. As liquidity tends to act as a price magnet, these levels often become focal points for market movements, with traders seeking to capitalize on liquidity sweeps.

Recent market consolidation has resulted in the formation of a significant cluster of liquidation levels just above the key $3.5K resistance. These levels correspond to short-position liquidation levels, making them an attractive target for bulls and institutional buyers. Given this setup, Ethereum’s price could be drawn toward this liquidity pocket, increasing the probability of a breakout above $3.5K in the mid-term.

Despite the current lack of strong bullish momentum, the $3.5K level remains a crucial battleground. A decisive move above this resistance to trigger short liquidations could act as a catalyst for further upside, potentially propelling Ethereum toward the psychological $4K mark in the coming sessions.

Ripple has been facing a prolonged period of low market activity, leading to sideways movement and minimal volatility near the $3.2 level.

However, emerging technical signals suggest that a potential correction may be on the horizon.

XRP Analysis

By Shayan

The Daily Chart

XRP has steadily climbed toward the $3.2 resistance, a crucial supply zone that has historically posed challenges for buyers. This level is a major obstacle, requiring strong bullish momentum to be reclaimed.

Meanwhile, price action has formed an ascending wedge, a pattern often associated with bearish reversals if the lower boundary is breached. Additionally, a bearish divergence between the price and the RSI indicator suggests that bullish momentum is fading, signaling the possibility of a pullback.

If XRP fails to sustain its current levels and breaks below the wedge’s lower boundary, a deeper correction toward the $2.5 support zone could materialize in the mid-term.

The 4-Hour Chart

Ripple has been consolidating around the $3.2 mark on the lower timeframe, with an initial rejection triggering long-position liquidations. This development cooled down the futures market, allowing for another push toward the resistance.

XRP is attempting to reclaim this level for the second time, with buyers aiming for a breakout toward $4. However, the current bullish momentum appears insufficient, increasing the likelihood of a temporary retracement before another attempt at higher prices.

If a pullback occurs, the 0.5-0.618 Fibonacci retracement zone will serve as a critical support area where buyers are expected to step in and defend the price in the mid-term.

Although the previous month (and the start of the new year) began on the wrong foot, with BTC standing firmly within fix-digit price territory, the asset managed to turn it around and charted a new all-time high a couple of weeks back.

All eyes have now turned to February, which is historically a highly profitable month for the largest cryptocurrency.

Strong January Ends

Recall that BTC experienced a massive correction at the end of 2024, with its price tumbling from $100,000 on December 26 to under $92,000 on December 30. After some more volatility within the five-digit territory, bitcoin entered the new year at around $93,500 (on most exchanges).

Within less than a week, it found itself surging past the coveted $100,000 line, only to see a massive rejection at this point that propelled a violent correction. On January 13, BTC slumped below $90,000 for the first time since November amid fear and uncertainty in the US political and economic scene.

However, the bulls intervened at this point and didn’t allow any further declines despite multiple warnings about a potential breakdown to as low as $75,000. Just the opposite, BTC reversed its trajectory quite decisively and jumped past $100,000 three days later.

More volatility ensued on January 20, which was Donald Trump’s inauguration day. Hours before the highly anticipated event, BTC slumped from $106,000 to under $100,000 but exploded by nearly ten grand to register a new all-time high of over $109,000.

This record was reached somewhat surprisingly, and BTC didn’t last there long. Nevertheless, it managed to end the month within six-digit territory, closing January with a 9.29% surge, according to CoinGlass.

What’s Next?

Now that the first month of the new year is officially in the record books, the community has turned its sight to February, which is among the best months for BTC, historically. In fact, just two of the last 12 Februaries have ended in the red, and the last one was five years ago – in 2020.

Moreover, all three that came after a halving year have resulted in substantial returns – 61.77% in 2013, 23.07% in 2017, and 36.78% in 2021. Consequently, there’s a lot to be hopeful for the next month.

There’s certainly a lot of bullish sentiment across the market, such as the growing number of USDT and USDC sitting on exchanges, which typically suggests that investors are preparing to enter the market.

Separately, President Trump signed an executive order to explore adding certain digital assets into the US reserves, which could give the markets a massive boost if accepted.