Etherum has surged more than 25% since delayed March, retreating toward levels that have defined the upper end of its recent recovery range and testing resistance that has capped every previous attempt higher. The move was compelling enough to change sentiment – but the CryptoQuant analyst just spotted a discrepancy in the on-chain data that complicates the bullish reading and raises a question that the price chart can’t answer on its own.

The analyst examines the exchange supply ratio, a metric that tracks the relationship between supply on an exchange and the broader market. Historically, when this ratio has fallen sharply, it has been accompanied by price declines, which create a bottom. The logic is elementary: a falling currency supply means fewer coins are available for immediate sale, which reduces selling pressure and signals that the market is approaching a zone where price usually finds support.

The current chart shows this pattern – but only halfway. The indicator dropped to a low level again, confirming the reduction in currency supply that the indicator is designed to detect. The corresponding decline in prices that has historically accompanied this is missing. Instead of falling to form a bottom with the ratio, Ethereum’s price continues to remain relatively high.

This gap – between the ratio indicating that a bottom should be forming and the price not yet correcting to form it – is what the analyst has identified as a divergence requiring attention.

The ratio has bottomed out. The price didn’t go up. This gap tends to close

CryptoQuant analyst interpretation the discrepancy is straightforward and does not overcomplicate what the data describes. The reduction in supply tracked by the Supply Replacement Ratio has already occurred – this part of the historical sequence has been completed. What didn’t happen was the corresponding price movement that accompanied it in the past. The market has received the signal and has not yet reacted as it should have.

The analyst gives a specific explanation for the delay. The influence of derivatives can maintain prices at levels that the cash market structure alone would not be able to maintain. When leveraged positioning creates artificial demand – offers that exist due to borrowed capital rather than genuine purchase conviction – the price can remain stable for longer than on-chain data suggests. This resistance is not a denial of the signal. This is a postponement of her resolution.

The historical data regarding these discrepancies is consistent. They do not tend to resolve upwards, and the price boost justifies the increased level. They tend to resolve downwards and the price drops to the level that indicates that the ratio should be. The difference between the current position of the indicator and the current price position is the distance the market may need before both sides return to alignment.

Ethereum’s 25% growth since the end of March is real. The analyst warns not so much that the recovery was wrong, but indicates that the price may still need to complete the bottoming process that the indicator has already signaled. The decline may be delayed. The data shows that it will probably not be canceled.

Ethereum is regaining structure but is facing a lot of overhead resistance

Ethereum is trading near $2,280 after rebounding from the sub-$2,000 region, but the weekly chart shows the market is still between recovery and structural resistance. The recent rebound has restored the 50-week moving average, which is a constructive development, although the price remains compressed below the 100-week and 200-week moving averages, which continue to trend lower.

This setting matters. Historically, sustained bullish expansions occur when Ethereum recovers and holds above these higher average time frames. Until this happens, rallies tend to act as relief moves in a broader consolidation or distribution.

The $2,200-$2,300 zone currently serves as the pivot. It previously served as support for the 2024 structure and is now being tested from the bottom again. The market’s ability to sustain this level will determine whether the latest move turns into a trend reversal or turns into another lower high.

Volume does not yet confirm a robust belief. Although the rebound from the lows was pointed, subsequent purchases were relatively muted compared to earlier impulsive phases, suggesting cautious participation.

A break above $2,600 would definitely change the structure and open the way towards $3,000. Failure to hold $2,200 would put Ethereum at risk of falling again, with $1,900 being the next major support zone.

Featured image from ChatGPT, chart from TradingView.com