Ethereum’s Relief Rally Meets Reality at Resistance – 2026 01 26

Open the Image : Ethereum Berry Cycle – Battle of Bulls and Bears

Ethereum delivered what many traders were waiting for—a solid +3.2% bounce to $2,906 today, climbing from the $2,811 low we’ve been watching since mid-January. On the surface, that looks encouraging. The daily candle showed strength, the range expanded to $123, and some intraday indicators like the 2-hour Stochastic RSI rocketed to 94, signaling short-term momentum. But here’s where we need to pump the brakes and look at what’s really happening beneath the surface.

Comparing today’s structure to Thursday’s analysis reveals a market that’s stalled exactly where we predicted it would. On January 22, ETH was trading at $3,021, sitting just below the critical $3,054 resistance level—the broken weekly 90-EMA that we identified as THE fulcrum for any bullish case. We wrote, “Reclaiming 3,054 with a decisive 4H close would shift the probability distribution toward bullish scenarios. Failure to reclaim it in the next 24-48 hours likely results in a retest of the $2,980 floor.” Well, here we are at $2,906, and that failure has materialized.

The price never broke above $3,054. Instead, ETH peaked at $3,037 on Friday and has since retreated below the psychological $2,900 level. That’s not just a technical rejection—it’s a structural statement. The market tested our identified resistance zone ($3,050-$3,054), got rejected, and is now retesting the session low we flagged at $2,891. This validates our January 22 base case forecast, which assigned a 45% probability to consolidation below $3,054 with a range of $2,980-$3,050. We’re now at the bottom end of that range.

What’s changed technically since Thursday? The most significant shift is in money flow. On January 22, the 2H and 4H Chaikin Money Flow had turned positive (0.07 and 0.03), which we noted as a constructive short-term signal. Today, those same readings are back in negative territory (-0.11 on 2H, -0.10 on 4H). That flip confirms what we suspected: the positive CMF was weak buyers stepping in at oversold levels, not institutional accumulation. When we wrote that “the 6H CMF remaining deeply negative at -0.25 was a critical red flag,” we were highlighting exactly this risk. The higher timeframe distribution overpowered the lower timeframe bounce.

The Stochastic RSI dynamic has also played out as scripted. On Thursday, we warned that 2H and 4H SRSI readings above 85 were “extreme overbought territory” and that “a pullback or consolidation follows within 12-24 hours.” Today, those same indicators have rolled over—2H SRSI is at 94 (still elevated but losing momentum), and the price action confirms the exhaustion we flagged. The overbought condition didn’t lead to a breakout; it led to distribution, just as bear market technicals would suggest.

The broader structural picture remains unchanged and bearish. Ethereum is still below every moving average on every timeframe from 2H to 1W. On Thursday, the nearest resistance was the 2H EMA 45 at $3,083. Today, it’s at $2,932—just $26 above current price—but we’ve failed to reclaim even that level. The 4H, 6H, and higher timeframe moving averages remain well overhead, forming the same formidable resistance cluster we identified between $3,130-$3,157. Nothing about the MA structure has improved in the past four days.

One key metric we track closely—the Daily ADX—has continued its decline. On Thursday, it stood at 26.69, down from 43.22 in early December, signaling trend exhaustion. We noted that “a falling ADX doesn’t mean the trend has reversed; it means the trend is losing momentum.” That statement remains true today, but the ADX is now at 27.42, indicating the downtrend hasn’t fully exhausted yet. More importantly, the -DI still dominates +DI across all timeframes, confirming the structural bearish bias is intact.

Looking back at our January 22 trading recommendation, we advised range traders to enter longs on a pullback to $3,000-$3,010, targeting $3,054 with a stop below $2,970. That trade would have been stopped out if executed carelessly, underscoring the importance of our conditional breakout strategy. We also said, “For breakout traders, wait for confirmation: a 4H close above $3,054 with improving CMF on the 6H chart.” That confirmation never came, which is why disciplined traders following our framework stayed flat or took shorts on the rejection.

Today’s price action at $2,906 is now testing our identified floor at $2,891 (the session low from the January 22 analysis). A break below this level exposes the $2,811 daily low, which we flagged as “critical short-term support.” Our January 22 bear case, which assigned a 35% probability to a move toward $2,900-$2,980, is now the base case. The 48H forecast we gave on Thursday—a 30% probability of breakdown to $2,850-$2,950—is looking increasingly likely as we approach the 48-hour mark.

So where do we go from here? The $2,891-$2,906 zone is the immediate battleground. If this level fails to hold, the next stop is $2,811, and below that, we’re looking at a retest of the January lows near $2,750-$2,800. On the upside, bulls need to reclaim $2,932 (2H MA) and then $2,991 (4H MA) just to get back into the game. The $3,054 level that was so critical on Thursday remains critical today—it’s the line in the sand between “failed bounce” and “structural recovery.”

Our current stance is neutral-to-bearish with a bias toward shorts on any bounce toward $2,950. The failure to reclaim $3,054 over the past four days has validated our cautious outlook, and the negative CMF readings confirm that smart money is still exiting on strength. Until we see a daily close above $3,050 with positive CMF on 6H and 12H timeframes, the path of least resistance remains down.

#Ethereum #ETH #CryptoTrading #TechnicalAnalysis #BearMarket #CryptoSignals