Ethereum News Today: Ethereum Breakout Gains Strength as Bears Misread Minor 15% Pullback

Ethereum’s recent price action has defied bearish expectations, with a 15% pullback in early July failing to disrupt its broader bullish momentum. The cryptocurrency broke out of a five-year consolidation range, retesting the $3,600–$3,700 level and signaling a potential continuation of its upward trajectory. Traders and analysts note that the retest, coupled with technical indicators like the Relative Strength Index (RSI) entering a “power zone,” supports the case for further gains. The breakout, confirmed by strong volume and key level rejections, suggests Ethereum is exiting a prolonged consolidation phase and setting the stage for higher targets.

The 15% dip in early July, while alarming to short-term traders, has historically been a false signal rather than a top. Sykodelic_, a crypto analyst, emphasized that bearish sentiment during minor pullbacks often precedes strong bullish continuation. “The more bears we have show up after a tiny retrace, the further we are from the top,” he remarked, highlighting that market psychology during such dips typically favors trend persistence. This aligns with the current structure, where Ethereum’s price has held firm in the retest zone, indicating resilience.

Technical indicators reinforce the bullish case. Ethereum’s RSI on the weekly chart is entering a level historically associated with explosive rallies, while a bullish moving average crossover suggests continuation rather than exhaustion. Analysts point to the retest of the broken range as a critical threshold. Holding the $3,600–$3,700 support could open the door to $4,800–$5,500 based on prior breakout behavior. Failure to maintain this level, however, would invalidate the structure and risk a reversal. So far, the response at this zone has been robust, preserving the integrity of the bullish thesis.

The market’s reaction to the pullback also underscores broader sentiment. Despite the dip, Ethereum’s 50% surge since the previous low has drawn institutional and retail attention, with liquidity deviations confirming the breakout’s validity. The clean exit from the symmetrical triangle pattern, supported by volume and price action, suggests the move is not a temporary spike. This has led some to compare the current phase to prior cycles where RSI expansion fueled sustained momentum.

While the near-term focus remains on the retest zone, the broader implications for Ethereum’s trajectory are significant. A sustained move above $3,700 could reignite risk-on sentiment in the altcoin sector, potentially drawing capital away from Bitcoin, which has seen its dominance dip below 60% for the first time since late June. Institutional participation, including new listing initiatives and treasury strategies, further bolsters the narrative that Ethereum is transitioning from a speculative asset to a core portfolio holding.

However, analysts caution that the market must remain vigilant. Regulatory uncertainties and macroeconomic factors could introduce volatility, particularly if central bank policies shift or U.S. lawmakers introduce stricter crypto regulations. For now, the technical foundation and market psychology favor continuation, but traders should monitor key levels closely.

[1] Source: [1] [title: Ethereum Breakout Gains Strength as Bears Misread Minor 15% Pullback] [url: https://cryptofrontnews.com/ethereum-breakout-gains-strength-as-bears-misread-minor-15-pullback/]