Ethereum is trading just above $4,000 after a volatile week that left traders divided about its next major move.
While short-term indicators hint at renewed momentum, a growing number of analysts are warning that the network’s native token could be on the verge of a deeper correction if a key technical signal confirms.
Bearish MACD Warning Raises Concerns
Popular on-chain analyst Ali pointed out that Ethereum’s weekly MACD indicator is nearing a bearish crossover, a signal that historically preceded major declines. In his post, Ali noted that the last two times this pattern appeared, ETH fell 43% and 61%, respectively.
Looking at the weekly chart, the histogram has been shrinking for several weeks while the MACD line edges closer to crossing below the signal line. The loss of upward momentum mirrors past tops that triggered multi-month corrections.
Daily charts also show signs of weakness. The RSI has cooled to 44.5, indicating fading bullish strength, while the MACD on lower timeframes has already turned negative. If selling pressure deepens, analysts warn Ethereum could revisit key support levels near $3,600 or even $3,300.
Bull Flag or Breakdown?
Not everyone sees a storm ahead. Crypto Rover, another well-followed market analyst, argues that the same weekly structure could actually represent a bull flag pattern – a formation that often precedes strong upward continuation.
According to his analysis, Ethereum’s recent consolidation between $3,800 and $4,700 follows a sharp vertical rise earlier this year, forming what looks like a textbook “flag pole.” A breakout from this range could theoretically propel ETH toward new all-time highs around $7,000 to $8,000.
For now, Ethereum remains in a technical limbo – squeezed between opposing interpretations of the same chart. Traders watching shorter timeframes point to a slight uptick in momentum as the RSI steadies around 50, suggesting that ETH could attempt another push toward resistance before confirming either scenario.
Market Sentiment Divided
Across the broader market, sentiment remains mixed. Ethereum continues to hold above the psychological $4,000 mark, supported by strong inflows into DeFi projects and renewed developer activity. Yet caution lingers as traders recall that every major downturn in 2024 began with similar early warning signs on the MACD.
Until one of these patterns decisively breaks – either the bullish flag or the bearish crossover – Ethereum’s next big move remains a coin toss. What’s clear is that volatility is returning, and both bulls and bears are preparing for what could be a defining moment before year-end.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.