The price of Ethereum is making a notable recovery, nearing the $1,800 mark as improving geopolitical conditions and a significant short squeeze drive investor interest back into risk assets. Traders are keeping a close eye on the possibility of a breakout above critical resistance levels.

Currently, Ethereum has bounced back from a dip that saw it drop to around $1,505 earlier this week, sparked by U.S. military action in Iran which caused a massive sell-off in the crypto market. As tensions eased, optimism returned, leading to a resurgence in higher-risk investment.

A wave of short liquidations propelled ETH through various resistance points, bringing it closer to the psychologically significant $1,800 threshold. Furthermore, the positive sentiment in Asian markets, particularly with South Korea’s Kospi index rising by approximately 4% due to the boost from artificial intelligence and semiconductor stocks, has encouraged this shift toward growth assets.

Despite a reported net outflow of about $52 million from U.S. spot Ether ETFs on Thursday, Ethereum performed well, indicating strong overseas demand and crypto-native buying could offset the weaker institutional interest in the U.S. market. The presence of emerging regulatory clarity also plays a role, with CFTC leaders encouraging Congress to move forward with the Digital Asset Market Clarity Act, aimed at establishing a more defined regulatory environment for digital assets.

Additionally, Ethereum remains a dominant player in the tokenized real-world asset market, capturing nearly half of the global RWA value secured on its network. This solidifies its position amid expanding institutional tokenization activity.

The daily chart highlights Ethereum’s successful reclaiming of the 2/8 Murrey Math pivot near $1,750, with ongoing tests of the upper resistance levels around $1,800 to $1,833. The positive flow of capital is evidenced by the Chaikin Money Flow indicator moving into positive territory for the first time after weeks of selling pressure.

As technical indicators suggest bullish momentum, market participants are questioning whether buyers can maintain momentum to push ETH further upward or if it will retract if it fails to hold the line above $1,750, possibly invoking renewed bearish sentiments in the market.

This article is for informational purposes only and should not be considered financial advice.