Ethereum Faces Crucial EMA Squeeze as Breakout or Breakdown Looms

Ethereum is approaching a critical juncture that could shape the rest of the summer. Currently trading within a compressed range on the daily chart, ETH is caught between the 200-day EMA near $2,380 and the 50-day EMA around $2,500. This tight convergence, known as an EMA squeeze, often signals that a major price move is imminent as volatility compresses and market participants become indecisive.

Over the past three weeks, ETH has remained in this narrowing range following a failed breakout above $2,800 in early June. Since then, bears have capped upward momentum while bulls continue to defend the 200 EMA, preventing a deeper drop below $2,300. The 100 EMA is also closely aligned with the 50 EMA, reinforcing this technical bottleneck. Trading volume has declined during this phase, a common trait before volatility expansion.

The RSI remains neutral between 45 and 50, reflecting a balanced market with neither overbought nor oversold conditions. This neutral RSI reading combined with the squeeze pattern suggests that the next decisive move could be sharp and sudden.

A breakout above the 50 EMA could reignite bullish momentum, potentially sending ETH back toward the $2,800 resistance zone. However, a breakdown below the 200 EMA and $2,300 could trigger selling pressure and expose Ethereum to further losses, possibly testing the psychological $2,000 support level.

Traders are watching closely, as the resolution of this squeeze could set the tone for Ethereum’s short-term trend. Whether bulls or bears take control, the standoff is unlikely to last much longer, and the next move could be explosive. Stay alert as Ethereum hovers on the edge of a major technical shift.