Chart the Market (02/06/2025)

ETH, H4: 

Ethereum’s price action has taken a concerning turn following its recent rejection at the $2,761 resistance level. The cryptocurrency’s subsequent 10% decline signals a potential trend reversal, with technical indicators now flashing warning signs for bulls. This false breakout pattern carries particular significance as it occurred at a key psychological level, potentially trapping late buyers and creating overhead supply that could cap future rallies.

The $2,450 support level now emerges as critical for maintaining Ethereum’s bullish structure. This price zone has demonstrated its importance through multiple historical tests, serving as reliable support during previous pullbacks. However, the current technical picture suggests this support may be vulnerable. The sustained downward trajectory of the RSI indicates building selling pressure, while the MACD’s breakdown below the zero line typically precedes extended bearish moves in trending markets.

While the short-term outlook appears increasingly bearish, traders should remain alert to potential reversal signals. Any strong recovery back above $2,761 would invalidate the bearish scenario and suggest the recent decline was merely a shakeout of weak positions. 

Resistance Levels: 2750.00, 3050.00

Support Levels: 2450.00, 2080.00

GBP/JPY, H4

The GBP/JPY currency pair has exhibited concerning technical signals after completing a double top reversal pattern and subsequently falling more than 1%. This bearish formation gains added significance as the pair has now breached its established uptrend support line, suggesting a potential shift in market sentiment from bullish to bearish. Currently, the exchange rate is testing a crucial support level at 193.65, which represents a critical juncture for near-term directionality. A decisive break below this level would confirm the bearish reversal pattern and could potentially trigger accelerated selling pressure, with the next significant support zone likely emerging around 192.50-192.80.

Technical indicators further corroborate the weakening bullish case. The Relative Strength Index has rolled over after approaching overbought territory, demonstrating fading upward momentum, while the Moving Average Convergence Divergence indicator is now approaching the zero line from above, indicating that prior bullish momentum has effectively dissipated. These developments suggest that any near-term rallies may encounter fresh selling pressure unless the pair can reclaim its broken uptrend line.

Market participants should closely monitor price action around the 193.65 support level in coming sessions. A sustained break below this threshold would likely activate additional technical selling, while a firm rebound could lead to a period of consolidation before the next directional move emerges.

Resistance Levels: 196.00, 197.60

Support Levels: 191.90, 189.95