Ethereum Price Forecast: ETH Pulls Bear Trap After Cease-Fire – Is $3,000 Possible?

Ethereum (ETH) has gone up by nearly 7% in the past 24 hours as trading volumes have jumped by 34% during this period.

More than $335 million worth of short positions have been wiped out as a result of this move, which was primarily triggered by a cease-fire between Israel and Iran brokered by President Donald Trump.

ETH Long/Short Liquidations – Source: CoinGlass

Surprisingly, blown-up ETH short positions nearly equal those of Bitcoin (BTC) as bears may have gotten ahead of themselves during the weekend.

The past five days have been quite volatile as the U.S. entered this regional war after it bombed three important nuclear research and enrichment facilities located in Iranian territory.

Market sentiment has recovered slightly as reflected by the Fear and Greed Index. This sentiment gauge has moved from a low of 37, which indicated a fearful attitude among investors, to 47 at the time of writing, which implies a more neutral stance.

Upon reaching a record in mid-June, open interest (OI) in ETH futures has been progressively declining. However, today’s uptick seems to have encouraged traders once again, possibly as they see a potential continuation in the uptrend now that the market has a catalyst at hand to execute a short squeeze.

ETH Needs to Break the $2,750 Barrier to Get to $3K

The daily charts show that ETH has climbed back above its consolidation pattern and has successfully pulled a bear trap.

ETH/USD Daily Chart (Coinbase) – Source: TradingView

Traders who expected that these rising tensions between the U.S. and Iran could lead to a market meltdown are now in danger as the price could climb higher and blow up their stop-loss orders.

That said, it is still quite early to tell if this recovery implies a change in the trend from downtrend to uptrend as ETH is trading below its short-term and long-term exponential moving averages (EMAs) at the time.

Meanwhile, the Relative Strength Index (RSI) has not shown signs of a recovery yet as it is still hovering below its 14-day moving average. These bearish indicators are still not confirming a change in ETH’s trend.

The $2,750 resistance stands as the most relevant resistance to watch at the time. A break above this marker would increase the odds of an upcoming push to $3,000 to finally reach the target we have shared in a previous Ethereum price prediction.

Inverse H&S Breakout Would Confirm Bullish Outlook

Heading to the lower time frame, we can identify what seems to be an inverse head and shoulders pattern that could confirm ETH’s bullish outlook in the near term.

The pattern’s neckline stands at $2,450. A move above this level will trigger the signal but a retest and bounce off this level will confirm the pattern’s bullish bias.

ETH/USD Hourly Chart (Coinbase) – Source: TradingView

The Relative Strength Index (RSI) shows that positive momentum is strong in this lower time frame as it has reached overbought levels meaning that buyers have rushed to scoop up ETH tokens amid this shift in the geopolitical landscape.

If this breakout occurs, the first target to watch would be the $2,700 level, which is also the key resistance in the daily chart.