Last week's analysis suggested that Ethereum had several key criteria for entering a short position, including clearly defined targets.

At the same time, a caution was issued: if the price reached a critical level within the discount zone, it could trigger bullish price delivery. That’s exactly what happened—Ethereum hit that level, responded strongly, and is now up over 10%.

Ethereum technical analysis

ETHUSD - 1 Day Time Frame

While the recent bullish move is significant, it’s important to assess whether the momentum is strong enough to warrant closing or reversing the short position, or if continued patience is more prudent.

To make this decision more effectively, it’s crucial to monitor price action using technical parameters.

Focusing on the resistance zone that formed shortly after the earlier short entry, For reference, marked in blue on the attached chart, the key condition for maintaining the current bearish thesis is that Ethereum’s daily candle bodies remain below this resistance zone.

Should the price close above the upper boundary of this zone on the daily chart, it could invalidate the bearish structure. In that case, the zone’s role could shift and it may be seen as a bullish support zone.

However, if bearish price delivery resumes and the resistance zone holds, sell power may take the lead. The original potential Ethereum price targets could then still apply: a deeper retracement into the prior bullish impulse within the discount zone, followed by lower Sell-Side Liquidity levels.