Ethereum nears $2,560 resistance; breakout question looms

Fundamental view

This week, the Glamsterdam upgrade for Ethereum passed a significant private rehearsal before the Sepolia testnet launch scheduled for October 6. The test operated without issue under the new block-building rules, and Nethermind performed 2,302 tests of performance.

In the test environment, developers also ran a test with a 200 million gas block limit compared to about 60 million currently. The Glamsterdam upgrade aims to boost Ethereum's throughput and lower congestion and fee spikes through modifications such as block-level access lists and enshrined proposer-builder separation.

On the macroeconomic front, the Federal Reserve raised interest rates on Wednesday, as was widely anticipated, and indicated a less aggressive rate path than what the market had been pricing in. Following an initial overreaction and risk-off move, the market corrected and risk assets climbed.

Going forward, the Middle East situation warrants close attention since $100 oil, rate increases, and high bond yields could add pressure on Trump to conclude the conflict. A de-escalation phase may already be starting, as Trump has scheduled a meeting with Gulf leaders on Tuesday during the UN General Assembly in New York to talk about the next steps in the war with Iran. The Iranian delegation is notably permitted to attend.

If de-escalation occurs, oil prices would fall, alleviating inflation and rate hike worries and greatly boosting overall risk appetite, which would ultimately benefit the cryptocurrency market.

Daily Ethereum technical picture

Ethereum bounced off the 2,360 support area and is now testing the 2,560 resistance level. Sellers are expected to act around this resistance, with a clearly defined risk above it, aiming for a move back to the support. Buyers, conversely, want to see a breakout to the upside to boost bullish bets towards the 3,000 level.

Ethereum technical analysis – four-hour timeframe

Ethereum has been rangebound for roughly a month. Traders will keep playing the range, buying at support and selling at resistance, until a breakout occurs in either direction.

Ethereum technical analysis – one-hour timeframe

A minor upward trendline is defining the bullish momentum on the hourly timeframe. In case of a pullback, buyers are expected to defend the trendline with a defined risk below it, aiming to push to new highs and target a breakout. Sellers, alternatively, will seek a break lower to enter and drive the price down to the support.

Upcoming events

Tuesday features the meeting between Trump and Gulf leaders, while Wednesday brings the Flash US PMI data.