Market Overview: Ethereum (ETHUSD) – 2025-08-31

• Ethereum (ETHUSD) opened at $4,369.64, reached a high of $4,454.44, a low of $4,334.00, and closed at $4,462.47 by 12:00 ET today.
• Strong bullish momentum emerged after 00:45 ET, with a surge to a new 24-hour high of $4,454.44 amid heavy volume.
• Volatility expanded significantly, with Ethereum oscillating between $4,334.00 and $4,454.44 over 24 hours.
• Volume spiked late in the session, particularly between 00:00 and 09:45 ET, confirming the bullish breakout.
• A key 15-minute engulfing pattern formed at 00:15 ET, signaling a reversal from a short-term downtrend to a sharp uptrend.

Structure & Formations

Ethereum exhibited a clear bullish reversal pattern from the early morning hours, with a 15-minute engulfing candle forming at 00:15 ET. This candle followed a consolidation phase and preceded a sharp upward move. Key support levels were observed at $4,334.00 and $4,360.00, both of which held during the early bearish phase. Resistance levels at $4,450.00 and $4,475.00 were tested and cleared, confirming upward momentum.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages crossed to the upside after 00:45 ET, signaling a strong bear-to-bull reversal. On the daily timeframe, the 50 and 200-period moving averages remained in a bullish configuration, with the 50-period above the 200-period.

MACD & RSI

MACD crossed into positive territory at 00:15 ET and continued to rise, confirming the bullish breakout. RSI surged from the 50–60 range into overbought territory above 70 by 02:00 ET, suggesting strong upward momentum but potential short-term pullback risk.

Bollinger Bands

Price broke out above the upper Bollinger Band at 00:45 ET, indicating high volatility and a potential continuation of the trend. The band width had expanded significantly during the session, signaling an increase in market uncertainty and potential follow-through.

Volume & Turnover

Notional turnover spiked at 00:15 ET and again at 00:45 ET, with volume increasing from an average of 0.05 BTC per candle to over 0.74 BTC in the early hours. This volume surge confirmed the bullish breakout and provided strong validation for the move above $4,450.00. There was no notable divergence between price and volume, reinforcing the strength of the move.

Fibonacci Retracements

On the 15-minute chart, the $4,450.00 and $4,475.00 levels corresponded closely to 61.8% and 78.6% Fibonacci retracement levels from the earlier bearish swing. On the daily timeframe, the 38.2% and 61.8% levels aligned with key psychological and technical resistance, which were all cleared with volume confirmation.

Backtest Hypothesis

To build a backtest strategy, we could design a system that enters a long position at the open when the 15-minute MACD turns positive and a bullish engulfing pattern forms. This would align with the pattern observed on the 1st of September 2025. Exits could be triggered at the next day's open or with a fixed 5% stop-loss and 8% take-profit. Testing this approach on Ethereum and potentially on a broader basket like SPY could provide insights into its robustness across markets. This setup leverages both momentum and pattern signals, making it a compelling candidate for further analysis.