Ethereum's latest rally has once again lost momentum, with the cryptocurrency struggling to stay above the $4,000 mark. With weak demand and falling spot ETF inflows weighing on sentiment, analysts warn that Ether (ETH) could see a deeper correction towards $3,100 if buyers do not regain control.
In brief
- Ethereum fails to hold above $4,000, triggering renewed selling pressure and caution among traders.
- Analysts warn that a fall towards $3,100 is possible if buyers fail to regain control near the critical $4,000 zone.
- Spot ETF outflows and low buyer participation underscore the market's waning confidence in Ethereum's near-term strength.
- A break above $4,000–4,300 could mark the start of a new bullish phase, with $5,000 as the next key objective.
Ethereum technical indicators sound warning as $4,000 zone triggers fresh wave of selling
Ether slipped to around $3,800 on Tuesday, marking another failed attempt to hold above $4,000. The pullback follows continued net redemptions of spot Ethereum ETFs and a weakened technical setup signaling a potential move to the downside.
Ether has climbed 16% since its recent low at $3,500, but selling pressure quickly built near the psychological $4,000 level. Market observers have noted that this area has historically acted as a strong resistance point.
Trader Philakone noted that Ethereum continues to face strong resistance near the $4,000 mark — a level that previously triggered a major sell-off in December 2024, leading to a 66% decline.
Ethereum bulls face critical test at $4,000 as analysts eye breakout zone
Crypto commentator Daan Crypto Trades highlighted that bulls need to push and sustain the price above $4,000 to confirm a recovery. He explained that repeated failures to pass this level could signal additional weakness in the short and medium term.
Other market analysts also gave their opinion on the subject:
- Daan Crypto Trades noted that a daily close above $4,000 could help Ethereum re-enter its previous trading range and move away from recent lows.
- He highlighted that the key resistance zone around $4,000–4,100 will likely see an intense battle between buyers and sellers.
- Jas Crypto added that this level will determine whether the current pullback turns into a deeper correction or serves as a brief pause before the next uptrend.
- According to him, the asset could potentially reach $5,000 if bulls successfully defend the $4,000 price level.
Analysts agree that a sustained break above the $4,000–4,300 zone would be the first sign of a new bullish phase.
Buyer fatigue limits bullish momentum
Despite several rebound attempts, Ether's price remains capped below $4,000 as buyer interest continues to fade. Spot trading data shows weak participation from new buyers — indicating that the recent rally lacks conviction.
Spot volume delta, a metric measuring the balance between buying and selling volumes, remains negative on major exchanges. This indicates that selling activity still outweighs buying pressure, reducing the likelihood of a strong breakout in the near term.
ETF activity further reinforces this trend. Data from SoSoValue showed that spot Ethereum ETFs saw outflows in six of the last eight trading days.
On Monday alone, Ether investment vehicles experienced $145.7 million in investor redemptionsbringing last week's total releases to $640.5 million. For sentiment to improve, ETF inflows and overall market demand must return. Without further buying momentum, analysts warn that any move above $4,000 could be short-lived.
Bear Flag Break Points Toward Target At $3,100
From a technical perspective, Ether price action has formed a bearish continuation pattern called a “bear flag” on the 12-hour chart. The pattern was confirmed when ETH fell below the flag's lower limit at $4,000 on Tuesday, signaling a potential move lower.
Here are other key technical elements and trends to note:
- The bearish flag pattern indicates a potential downside target around $3,120, a possible 20% decline from current prices.
- The Relative Strength Index (RSI) remains below the neutral level of 50, showing that market momentum still favors sellers.
- Some traders are maintaining a positive outlook, viewing the recent decline as a healthy correction in Ethereum's broader uptrend.
- Analyst Jelle suggested that ETH could retest the key breakout level around $4,000 before attempting to regain upward momentum.
With near-term signals pointing to further weakness, many investors are watching closely to see if bulls can reclaim $4,000. A decisive recovery above this level could reverse market sentiment and restart the push towards $5,000. Until then, Ethereum remains in a delicate position, balancing between a possible rebound and the risk of a further decline towards $3,100.
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