Technical Structure Shows Symmetrical Triangle Pattern
Ethereum is currently trading around $4,509, showing some recovery after finding support at the $4,307 level. The price action has been contained within what appears to be a symmetrical triangle pattern on the daily chart. This technical formation suggests the market is coiling, which typically precedes a significant directional move.
The support line traces back to April’s lows and now converges with the 20-day exponential moving average around $4,307. On the resistance side, there’s a descending trendline near $4,560 that has repeatedly capped upward attempts since August. The RSI reading of 57 indicates neutral-to-bullish momentum, having recovered from oversold conditions earlier.
I think the key level to watch is that $4,560 resistance. If buyers can push through that with conviction, it could open the path toward $4,700 and potentially $4,850. But if they fail, we might see a pullback toward $4,238 or even the $3,900 area where the 100-day EMA provides additional support.
U.S. Tax Exemption Provides Fundamental Support
This week brought significant news from the U.S. Treasury, which exempted Ethereum from the 15% corporate tax. This regulatory development removes a potential cost barrier for corporations considering holding ETH on their balance sheets. It’s a meaningful step that positions Ethereum more favorably for institutional adoption.
Market reaction has been cautiously positive, with sentiment improving across futures markets and staking activity. Traders seem to view this as validation of Ethereum’s standing among layer-1 networks. The timing is interesting because it comes when the technical setup was already suggesting a potential breakout.
On-Chain Activity Shows Mixed Signals
Exchange data reveals about $22.4 million in net outflows on October 3, which suggests some accumulation as ETH reclaimed the $4,500 level. However, these flows appear uneven compared to the heavy accumulation streaks we saw back in July.
Spot activity hasn’t shown strong conviction yet. The alternating inflows and outflows indicate traders remain somewhat cautious about committing at current price levels. Futures open interest has stabilized, showing more defensive positioning rather than aggressive long exposure.
Without consistent net outflows supporting the price action, Ethereum might remain range-bound within this triangle pattern for a while longer. The market seems to be waiting for clearer signals before making bigger moves.
Short-Term Outlook Hinges on Key Levels
The broader uptrend remains intact as long as ETH stays above $3,900. That’s the critical level that would need to hold to maintain the bullish structure. A decisive break through $4,560 would be significant, potentially opening the door toward $4,850 and possibly $5,000 in the coming weeks.
Ethereum finds itself at an interesting crossroads. The tax exemption provides solid fundamental support, while the technical compression suggests a larger move is approaching. If ETH can clear $4,560 with momentum and sustained outflows support the breakout, we might see movement toward the $4,850-$5,000 range. But failure to hold above $4,307 could delay the bullish scenario and expose the $3,900 zone.
For now, Ethereum remains balanced between these positive fundamentals and key technical barriers. Buyers are looking for confirmation that the next leg higher is beginning.
