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Ethereum is recovering slightly after a massive drop that took the price below $4,000. The broader market remains cautious as traders reassess their positions following recent volatility, which could lead to a reversal of the bullish trend.
Technical Analysis
By Shayan
The Daily Chart
On the daily timeframe, ETH recently broke below the midline of its ascending channel, the 100-day moving average, and touched the 0.5 Fibonacci retracement level near $3,400-$3,500. This zone coincides with the previous structure support, triggering a bounce toward $3,800.
However, the RSI is still below 40, showing weak momentum. A daily close back above $4,000 could mark a short-term recovery, but failure to reclaim the channel would likely send ETH below the $3,000 range, which would mean the end of the bull market.
The 4-Hour Chart
The 4-hour chart reveals that Ethereum found temporary support within the $3,400 demand zone after a sharp decline. The RSI also dipped into the oversold area, and is now near 24, suggesting a potential short-term reversal.
Still, resistance at $3,800 remains critical. A rejection there could lead to another retest of $3,400, while a clean breakout may open the path toward $4,200 again.
Onchain Analysis
Funding Rates
Funding rates across exchanges have plunged into negative territory, the lowest since late 2024, as traders rushed to unwind long positions. This reset indicates fear and liquidation pressure, but could also hint at a potential bottom if the bearish sentiment continues while the price stabilizes. Historically, negative funding rates during deep pullbacks have preceded short-term recoveries once selling momentum fades.
Therefore, while the market could be in the early stages of a bearish reversal, there is still hope that this move could just be a flush out to cool off the futures market and pave the way for a spot-driven, sustainable rally.
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Cryptocurrency charts by TradingView.
Source: https://cryptopotato.com/ethereum-price-analysis-eth-could-drop-below-3k-without-key-recovery/