Ethereum is once again testing critical support after failing to maintain momentum above the $3.6K zone. Current market positioning suggests that the recent bounce may have been a short-term corrective move within a broader consolidation phase.
Technical Analysis
By Shayan
The Daily Chart
On the daily timeframe, ETH remains confined within a descending parallel channel, and the ongoing rejections from the upper and middle boundaries confirm the pattern’s ongoing dominance. The price failed to sustain above the $3.6K–$3.7K resistance block, leading to renewed selling pressure as it retests the channel’s lower boundary and the 200-day moving average (around $3.3K).
This zone now forms the immediate battleground between bulls and bears. A clean close below the 200-day MA could expose ETH to a deeper retest of the $3.0K–$3.1K demand zone, where a more significant liquidity pocket awaits.
On the other hand, reclaiming $3.6K would revalidate the bullish recovery structure, potentially opening the path toward $3.9K–$4.0K, where major unmitigated supply sits. Momentum, measured through RSI, has dropped below the 50 midline, reflecting deteriorating short-term strength and signalling caution until the structure stabilises.
The 4-Hour Chart
On the lower timeframe, ETH recently broke below a local ascending channel, confirming short-term weakness and the likelihood of another leg lower. The $3.45K–$3.5K area, which previously acted as a support pivot, is now functioning as intraday resistance, aligning with the lower boundary of the failed channel. As long as the price remains below this zone, the path of least resistance leans bearish.
The next key liquidity area sits around $3.2K–$3.3K, overlapping with the midline of the daily descending channel. This region could serve as a potential reaction base for short-term buyers if selling pressure intensifies. However, a clean break beneath this support would shift focus toward the $3.0K–$3.1K macro demand, the same level seen in the daily structure as a historically significant accumulation area.
Sentiment Analysis
By Shayan
The ETH 2-week liquidation heatmap reveals that dense clusters of leveraged positions have accumulated in two major zones:
- Above $3.8K–$3.9K: A thick concentration of short liquidations, indicating that any breakout rally into this area could trigger a rapid move upward as shorts are forced to close.
- Below $3.2K–$3.0K: A wide, long liquidation zone, suggesting that aggressive downside wicks into this region could serve as a liquidity grab before a potential rebound.
Currently, ETH is positioned between both extremes, trading in a compressed equilibrium. This reinforces the idea that the next directional move will likely be liquidity-driven, either a sweep of lower long liquidations before reversal, or a push above $3.9K to fuel a late-stage short squeeze.
