Ethereum (ETH) climbed approximately 4% in the last 24 hours, breaking above $2,400 as global risk assets rallied following the US midterm elections.
The second-largest cryptocurrency is trading around $2,415 after reaching its highest level since October 23, supported by improving market sentiment and a wave of liquidations across cryptocurrency derivatives markets.
The rally followed a decisive Democratic victory in Tuesday’s elections, with the party securing control of both the House of Representatives and the Senate.
President Donald Trump subsequently indicated that he was willing to work with Democratic lawmakers, offering investors some reassurance about the potential for cooperation between the White House and Congress.
Ethereum’s recovery also coincided with a broader cryptocurrency market rebound, as the total digital asset market capitalization increased approximately 3%.
Technically, ETH has reclaimed several important moving averages and broken above a descending resistance trendline, improving its near-term outlook.
However, signs of stretched momentum suggest that the cryptocurrency could face resistance as it approaches the $2,548 level.
Ethereum rallies following Democratic victory
Ethereum’s recovery gathered momentum after Democrats secured sweeping victories in the US midterm elections.
The party won control of both congressional chambers while also securing important gubernatorial victories, including in Texas and Nevada.
The election results marked a significant shift in Washington’s political landscape and raised questions about the direction of economic and regulatory policymaking during the remainder of President Trump’s term.
However, Trump’s response appeared to ease some concerns about prolonged political confrontation.
According to The New York Times, the president said he was “absolutely willing” to work with Democrats following the results.
The statement suggested that cooperation on certain legislative priorities could remain possible despite the change in congressional leadership.
Vice President JD Vance, meanwhile, attributed the Republican Party’s electoral losses largely to public dissatisfaction with the Iran war.
In a Wednesday post on X, Vance argued that the conflict had played a decisive role in the election outcome.
He also pointed to voter concerns about inflation and the desire to end the war as important factors behind the Democratic victory.
These developments contributed to a changing political backdrop as financial markets assessed the potential implications for government spending, inflation, and economic policy.
Ethereum’s advance triggered substantial liquidations across cryptocurrency derivatives markets.
According to CoinGlass, approximately $195.4 million in ETH positions were liquidated over the last 24 hours.
Short positions accounted for $112.70 million of the total, indicating that traders betting on further price declines were caught off guard by the recovery.
These liquidations can add upward pressure because closing short positions typically requires buying back the underlying exposure.
The cryptocurrency also reclaimed its realized price, a closely watched on-chain valuation metric.
Ethereum breaks descending trendline as technical outlook improves
Ethereum’s daily chart shows a notable improvement after the cryptocurrency broke above a descending resistance trendline extending from October 2.
The breakout followed a move above the $2,355 horizontal resistance level and several important exponential moving averages.
ETH’s move above these indicators suggests that buying pressure has strengthened following the recent downturn.
The cryptocurrency currently trades around $2,415, slightly above its 50-day EMA at $2,411.
A successful retest of $2,411 could strengthen confidence in the breakout and encourage additional buying.
However, a decline below the level would suggest that the recent advance is losing momentum.
Momentum indicators support Ethereum’s recovery, although they also suggest that the recent rally could slow in the short term.
The 14-day Relative Strength Index (RSI) stands near 57. At 57, Ethereum’s RSI suggests that buyers have gained an advantage without pushing the market into an extreme momentum reading.
Ethereum’s immediate technical outlook depends on whether buyers can defend the $2,411 support area.
The level combines the 50-day EMA with a previously important horizontal price barrier. If ETH maintains its position above $2,411, the next significant upside target stands at $2,548.
A move from $2,430 to $2,548 would represent an additional gain of approximately 4.9%. A confirmed breakout above $2,548 could strengthen the recovery and bring the next resistance level at $2,636 into focus.
Beyond that, the $2,781 region represents a more ambitious bullish target.
On the downside, Ethereum’s first significant support zone lies between $2,359 and $2,355. The 20-day EMA at $2,359 closely aligns with the horizontal support level at $2,355, creating an important technical area.
A sustained break below this zone could expose the 100-day EMA near $2,346. Further weakness would bring the 200-day EMA at $2,323 into focus.
If Ethereum loses these moving averages, the recovery could weaken considerably, opening the door toward deeper support levels at $2,250 and $2,204.
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