Ethereum sellers could force the prices to dip all the way to this key level

Bitcoin fell nearly 19% from the short-term range highs at $52k, and Ethereum has also registered a similar drop of around 23% from local highs at $4121. Ethereum buyers tried hard, but ultimately in vain, to climb past the $3800 area over the past week. This attempt was rebuffed on no uncertain terms, and Ethereum sank below yet another area of demand at $3300-$3400.

Source: ETH/USDT on TradingView

The $3800 area, and the $3770 support level, were important levels for Ethereum, but the price tanked hard through these levels in recent days. This was accompanied by Bitcoin breaking through beneath the short-term range lows at $45.8k.

In September 2021, Ethereum bounced between the $3157 and $2800 levels for a week and a half, before climbing upward once more. This was something that could repeat.

The 50% Fibonacci retracement level, based on an ETH move from $1706 to $4868, appeared to have been flipped from support to resistance. The demand area at $3300 (cyan box) was broken on heavy trading volume, and the bearish retest could see ETH sink.

The shorter-term Fib levels (white) presented $3136 and $2928 as extension levels where ETH could potentially halt this move downward. The $2928 level had confluence from the other set of retracement levels ($2913), as well as higher timeframe support at $2990 and $2823.

Rationale

Source: ETH/USDT on TradingView

The RSI sank below 20 the day prior to press time and formed a higher low a few hours earlier while the price made a lower low. This was not a bullish divergence as the time period between was 23 periods, exceeding 14.

The OBV was in a steady decline, confirming that selling volume was behind the move for ETH. The Supertrend indicator also showed a sell signal and indicated the $3300 area to be a place where good R: R shorts could likely be opened.

Conclusion

The cluster of significant levels in the $2800-$2900 area marked it as strong support for ETH. The flip of $3300 from demand to supply could occur in the near term, and over the next couple of days, Ethereum could retest $3300 and sink toward $2800-$2900 in search of demand.