Ethereum Faces Turbulent Retreat Following Inability to Sustain Upward Trend
The price of Ethereum is gradually recovering after experiencing a decline from its previous highs above $4,000 during recent market-wide corrections. The recent pullback indicates a decline in sentiment as market participants reevaluate their positions in light of diminished confidence in short-term continuation trends.
This adjustment aligns with Bitcoin’s correction phase, impacting the behavior of broader altcoins through liquidity outflows and a resurgence of cautious sentiment. With ongoing volatility, analysts caution that a failure to maintain the mid-channel recovery may lead to deeper retracements in the near future.
Daily Chart Shows Breakdown Below 100-Day Moving Average Indicator
This week, Ethereum dropped below its ascending channel midpoint and the 100-day moving average on the daily chart. The decline reached the 0.5 Fibonacci retracement area between $3,400 and $3,500, creating temporary stabilization points for the time being.
As price action moved back toward $3,800, the relative strength index stayed below 40, indicating that weakened momentum signals continue to be present. Experts observe that a daily close above $4,000 could confirm a resurgence in strength; otherwise, declines may swiftly follow.
Ethereum Holds Support Near 3,400 as RSI Signals Possible Rebound Ahead
The four-hour chart indicates that ETH is maintaining support around $3,400 after experiencing significant declines, with the RSI readings showing an oversold condition near 24. Occasionally, these readings can signal rebounds; however, for a sustained upward movement, confirmation beyond the 3,800 resistance is necessary, along with consistent buying volume thereafter.
Not surpassing this threshold could lead to another retest around $3,400, potentially risking a drop below the $3,000 level in the near future. A clean breakout above resistance could pave the way for a potential recovery, aiming for the $4,200 extension levels in the short term.
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Negative Funding Rates Indicate Fear-Driven Market Reset Across Exchanges
On-chain data indicates that funding rates have plunged into deeply negative territory across major derivatives platforms, hitting lows not observed since 2024. Traders swiftly closed leveraged long positions, creating waves of liquidation that amplified downward momentum and significantly increased market uncertainty.
In the past, comparable circumstances have frequently characterized capitulation stages that come before stabilization phases, leading to natural trend reversals afterward. If funding continues to be negative while the price consolidates, Ethereum may see a resurgence in spot accumulation, gradually reversing the bearish sentiment.
Ethereum Faces Key Test as Futures Unwind While Market Awaits Rebound in Buying Momentum
The unwinding of excessive leverage reveals a wider concern as speculative capital moves away from futures instruments in search of safer allocations, albeit temporarily. Such unwinds frequently rectify market imbalances, establishing a foundation for more robust price discovery primarily influenced by natural demand mechanisms.
Experts indicate that this cleansing process may set the stage for Ethereum’s sustainable growth once the short-side pressure eventually subsides. The forthcoming sessions are poised to reveal if momentum will rebound or if the downward trends will persist amid ongoing selling pressure.
Key Levels Define Bullish and Bearish Scenarios for Coming Weeks Ahead
Key support is established between $3,400 and $3,500, creating a defensive range that provides a buffer against potential panic-driven declines at this time. In these areas, the risk approaches the psychological threshold of $3,000, which serves as the last line of defense before a long-term structural invalidation takes place.
If momentum picks up, along with rising volume and a resurgence in positive sentiment, upside targets are set at $3,800 and $4,200. The ability to uphold these ranges will determine if Ethereum shifts back into a bullish recovery or enters a deeper correction phase in the near future.
Ethereum Consolidates as Market Awaits Confirmation of Recovery Amid Volatile Conditions
Market participants expect a period of consolidation at current levels as Ethereum seeks to regain its technical balance following recent volatility. A slow but steady recovery, bolstered by spot inflows and easing derivatives metrics, has the potential to bring back stability and gradually rebuild investor confidence.
Even with short-term challenges, the long-term fundamentals of Ethereum, such as network activity and staking participation, continue to show resilience overall. Traders are on high alert, closely monitoring for confirmation signals that could indicate either a continuation of structural recovery or a potential breakdown below $3,000.
