Ethereum (ETH) Price Analysis: Powerful Recovery Stalls at $1600 Resistance as Bulls Struggle to Build Momentum

Ethereum saw a powerful recovery this week, rebounding sharply from a $1,380 low and surging over 21% within hours. The rally was fueled by a temporary shift in macro sentiment

The price of Ethereum (ETH) saw a strong recovery this week, rebounding sharply from a $1,380 low and surging over 21% within hours. The rally was fueled by a temporary shift in macro sentiment following US President Donald Trump’s announcement of a 90-day pause on reciprocal tariffs for all countries except China, which remains under a 125% tariff.

The news sparked a relief rally across financial markets, with Ethereum leading the bounce in the crypto sector. However, despite the strong move, ETH is still below key technical levels, and price action is showing signs of consolidation as bulls attempt to build momentum.

Meanwhile, the broader altcoin market continues to struggle, with sector-wide weakness putting pressure on investor confidence. According to data from Glassnode, all major altcoin sectors have experienced sharp declines in recent months. The correction has been broad-based and highly correlated, offering little in terms of idiosyncratic performance. Even Bitcoin (BTC) and Ethereum—typically seen as the most resilient assets in crypto—have posted negative returns over the same period.

As Ethereum enters a consolidation phase, traders are watching closely to see whether this bounce marks the beginning of a sustained recovery or just another short-lived reaction in a broader downtrend.

Ethereum Crucial Test As Macroeconomic Headwinds Linger

Ethereum is once again at a pivotal point in the market, following weeks of intense selling pressure and uncertainty. After plunging to fresh lows, ETH bulls are finally stepping in, attempting to reclaim key levels following a strong bounce from the $1,380 mark.

The move comes amid heightened volatility across global markets—not just in crypto, but in equities as well—as fears of a global recession and extended trade disputes between the U.S. and China continue to rattle investor sentiment.

Despite the bounce, Ethereum remains in fragile territory. The market is clearly divided: some investors see this rebound as the beginning of a recovery, while others caution it could be just a temporary pause in a deeper correction.

The macroeconomic environment remains hostile, with U.S. tariffs still posing a major risk to both traditional and digital assets. Earlier this week, the Trump administration announced a 90-day deferral of new tariffs on some goods from China, a move that was largely expected by economists and traders.

However, the administration also said it would be placing a 125% tariff on Chinese-made goods, a move that could have a significant impact on the global economy. The tariffs are part of a broader trade dispute between the two countries, which began in early 2018.

The trade dispute has been a major source of uncertainty for investors throughout the year, and any escalation could have far-reaching consequences for financial markets. In the meantime, investors will be watching closely to see how the macroeconomic landscape evolves in the coming months.

Glassnode Data Highlights Dire State Of Altcoins In 2020

According to data from blockchain analytics firm Glassnode, all major altcoin sectors have moved sharply lower in recent months, with most tokens now trading at 2020 lows. The correction has been broad-based and highly correlated, offering little in terms of idiosyncratic performance.

Even Bitcoin and Ethereum—typically viewed as the strongest assets in crypto—have posted negative returns in the same period, a stark contrast to the stellar gains they realized in 2019.

As the broader altcoin market continues to struggle, sector-wide weakness could put pressure on investor confidence. Most altcoins have bled out nearly all of the gains they made during the 2019 bull run, plunging to levels last seen in early 2019.

The weakness across the altcoin sector is in stark contrast to the performance of Bitcoin, which has managed to hold up better than most other crypto assets. Bitcoin is currently down about 40% from its 2019 highs, while most altcoins have plunged by 60% or more from their peaks.

The weakness in the altcoin sector is likely due to a number of factors, including the ongoing macroeconomic uncertainty, the U.S. trade disputes with China, and the broader weakness in risk assets.

Investors appear to be rotating out of riskier assets and into safer havens such as U.S. Treasury bonds. This shift in investor preference has put pressure on altcoins, which are typically seen as a riskier asset class than Bitcoin or U.S. Treasury bonds.

The weakness in the altcoin sector could continue in the near term as long as macroeconomic uncertainty persists and investors remain wary of risky assets. However, if there are signs of stabilization in the global economy and a resolution to the U.S.-China trade disputes, then we could see a reversal of this trend.

A sustained period of positive macroeconomic news could spark a strong rally in the altcoin sector as investors become more interested in risky assets again.