Buy ETHUSD with $2,400 in sight after breaking out of consolidation

ETHUSD has recently managed to break out of its consolidation channel. Unfortunately, it did not last long. During Thursday morning’s trading, prices turned downward, with overbought market conditions reinforcing the decline. Ethereum is now hovering around $2,253.45 after reaching an intraday peak of $2,327.57. Today’s drop of almost $74 left a candle with a prominent upper shadow, signaling that local supply is emerging near the highs. However, the trading session is not over yet, and the final outcome remains unclear.

The technical setup confirms splashes of volatility. After a month of trading within a narrow $1,822–$1,950 range, Bollinger Bands have recently widened significantly, with prices flying $200 above the upper limit ($2,055.87). This behavior increases the probability of a technical pause or a pullback toward the midline.

The Relative Strength Index (RSI) sits in overbought territory, making the risk of a short-term retreat more tangible at current levels. Meanwhile, the Chaikin Oscillator is now declining from the local peak reached on Wednesday. It is worth noting that the indicator’s elevated readings suggest that the recent upside was supported by substantial buying volumes. Thus, this was not a speculative spike in the crypto market. So far, the modest price drop recorded this morning is the only sign of potentially slowing capital inflows.

Yesterday’s sharp rally in Ethereum was driven by a wave of liquidity from the US Treasury and a massive short squeeze. Today, the market is undergoing a natural correction, “shaking out” overheated, highly leveraged long positions, with more than $400 million already liquidated.

Despite these fluctuations, Ethereum’s fundamental picture looks just fine. Gnosis is migrating to Layer 2 (L2), Coinbase is investing in Base, while developers are rolling out anti-censorship updates.

Consider the following trading strategy:

Buy ETHUSD between $2,200 and $2,250. Place Take profit at $2,400. Set Stop loss at $2,100.

The forecast remains valid from August 20 till August 27, 2026.