Peter Smith
Ethereum has been one of the more closely watched assets in crypto lately, and for good reason. After weeks of choppy price action, a fast selloff on the ETHUSDT perpetual 1-hour chart has brought ETH into a critical decision zone. The current bounce isn't necessarily a recovery — it looks more like a setup for a high-stakes retest, and how price reacts in the $1,950-$2,000 area will likely shape near-term momentum for the broader market.
Right now, ETH is hovering in the low $1,900s and attempting to stabilize after the recent drop. The rebound is setting up what traders call a distributive auction retest — price rallies back into the level that broke down, and the market decides whether to reject or reclaim it. If the initial decline was a genuine distribution move, the expectation is for ETH to push up into the prior Value Area Low (VaL), stall out, and roll back lower. Ethereum stabilizes near $1,900 — and as that compression analysis shows, tight volatility phases like this tend to resolve with a sharp directional move in either direction.
Why the $1,950-$2,000 Area Is the Key Resistance
The retest zone isn't just a round number. Several technical factors stack up in the same area: prior range support that has now flipped into potential supply, Fibonacci retracement levels clustered between 0.618 and 0.75, and a visible volume node sitting right in that pocket on the profile.
All of that creates meaningful resistance between $1,950 and $2,000. The setup mirrors what played out in a recent breakdown, where ETH hovering near $2,000 after a support breakdown showed exactly how former support can act as a ceiling once price falls through it.
The Scenario That Flips This Setup Bullish
There's a second condition worth watching: the "latest deviation" above a small weekend range. For the bearish read to stay valid, ETH should not reclaim that deviation level. If it does — and prints a market structure break (MSB) — the selloff gets reclassified as a failed auction. That would flip the framework toward a potential long setup instead of continued downside. A similar focus on downside targets and capped resistance was laid out in the ETH price analysis with $1,866 in focus.
This setup draws a clear line in the sand. Rejection at the VaL confluence keeps the bearish case intact and points toward lower prices. Acceptance above the deviation zone invalidates the breakdown and shifts near-term bias to the upside. With ETH pinned between defined liquidity pockets and volume nodes, how price reacts at this retest level could set the tone for the sessions ahead.
Peter Smith
