Ethereum’s Breakout from Triangle Formation Raises Concerns of a Bull Trap
Ethereum has broken out of a multi-week triangle formation near the $3,000 level, but the move is being met with skepticism due to weak volume and nearby resistance. The price has stalled at the 0.618 Fibonacci level and high resistance in the value area, raising concerns that the breakout could be a bull trap. According to experts, a bull trap often occurs after extended periods of tight consolidation, where breakouts attract late buyers before a sharp reversal occurs.
Key Technical Points of Ethereum Price
The advance has come on relatively low volume, and the price has already encountered a dense resistance group, raising the risk that the move lacks sustainability. The lack of confirmation from volume is a significant concern, as strong continuation moves are typically accompanied by an influx of participation, reflecting buyers’ conviction. In contrast, Ethereum’s breakout struggled to attract sustained demand, suggesting the move could be due to short-term positioning rather than an overall shift in market sentiment.
Fibonacci and Value Resistance Slowing Down Momentum
Adding to the cautious outlook is the fact that Ethereum has already rejected the local 0.618 Fibonacci retracement, which is in technical overlap with the value range high and key resistance on the lower time frame near the $3,700 region. This cluster represents a high probability reaction zone where bullish momentum often slows or reverses. So far, the price has failed to show acceptance above this resistance band, instead stalling and showing signs of hesitation, a behavior often seen when supply exceeds demand.
Bull Trap Conditions Forming
Bull traps often occur after extended periods of tight consolidation, where breakouts attract late buyers before a sharp reversal occurs. The current Ethereum setup conforms to several features of this pattern, even as Ethereum ETFs turn positive with $174 million in inflows led by ETHE. Another important factor is liquidity, with Ethereum currently having areas of lower residual liquidity below price, which can act like a magnet when the market begins to rotate. In such scenarios, the price often drops to rebalance liquidity before a more sustainable trend emerges.
Ethereum Price History and What to Expect
As long as Ethereum continues to trade below the 0.618 Fibonacci level and high resistance in the value region, the risk of a bull trap remains significant. Weak volume and stagnant momentum favor the likelihood of a rotation towards lower support levels, especially if price loses acceptance near the breakout zone. A decisive reclaim of resistance on increasing volume would invalidate the bearish scenario and reopen the path to the upside. Until then, caution is advised as the current situation suggests that Ethereum’s uptrend could prove to be a false move rather than the start of a sustainable uptrend.
ETHUSDT (4H) chart, source: TradingView
For more information on Ethereum’s price movement and analysis, visit https://crypto.news/ethereum-price-breaks-bullish-from-triangle-at-3000/
