Ethereum has been making efforts to recover from the significant losses it faced in late March. The altcoin, known as a leader in smart contracts, is currently valued at $1,774.

Despite signs of a potential recovery in Ethereum's network value and user activity, its market sentiment is still uncertain. The Net Unrealized Profit/Loss (NUPL) indicator, which measures the overall profit or loss of circulating coins, has entered a phase of capitulation.

Short-term holders (STHs) looking to make quick profits might hinder Ethereum's recovery by selling their positions. Investor confidence plays a crucial role in Ethereum's resurgence, with the need for holders to retain their assets to avoid another sell-off.

The Market Value to Realized Value (MVRV) Long/Short Difference indicator indicates a negative sentiment, suggesting resistance to the market's recovery efforts. The presence of profitable short-term holders may lead to further selling pressure on Ethereum, potentially hampering its upward momentum.

Ethereum's current price of $1,774 needs to surpass the resistance at $1,796 to continue its recovery towards $2,000. Failure to breach this resistance could result in a drop below the support at $1,671 and potentially a deeper pullback to $1,522. Strong buying support is essential to sustain the recovery amid the bearish outlook.

If market conditions remain favorable, Ethereum has the potential to break above $1,796 and even reach $1,906. These milestones would indicate a more sustainable recovery for Ethereum, potentially leading to a push towards $2,000.