Technical Analysis Reveals Weakening Bullish Momentum
Ethereum ‘s charts paint a concerning picture for short-term holders. The price structure shows a progressive weakening of the bullish momentum that had carried ETH above $3,200 in recent weeks. Buying volumes are noticeably decreasing while volatility increases, a combination often preceding significant downward movements.
The RSI indicator across multiple timeframes displays a notable bearish divergence. On the daily chart, the RSI has formed decreasing peaks while the price attempted to maintain its levels, a classic reversal signal.
The critical support zone currently sits between $3,150 and $3,100. A clear break of this level with significant volume would open the path toward the $3,000 zone, or even $2,900 where a former resistance turned support level is located. Traders are carefully monitoring price behavior around these zones to adjust their positions.
Furthermore, the 2-week chart reveals a massive liquidity cluster zone between $3,892 and $4,669. Whether ETH moves in one direction or the other out of this zone will likely determine the token’s future in the coming months.
In other words, if ETH doesn’t sustainably maintain or loses the $3,900 support again, a drop to $2,900 or all the way to the liquidity zone at $1,563 is possible. Indeed, a rejection from this zone would clearly indicate the sellers’ victory in this area. Additionally, the Woodies CCI on the 3-day and weekly timeframes has turned negative. If it also turns negative on the 2-week chart, this would increase the chances of a major ETH crash in the coming months.
Macroeconomic Factors Weighing on the Crypto Market
The current macroeconomic context isn’t helping Ethereum maintain its momentum. Traditional markets display palpable nervousness, with crypto-stock correlations remaining high. Institutional investors are adopting a cautious stance in the face of persistent economic uncertainties, reducing their exposure to risky assets, including cryptocurrencies.
Bitcoin’s dominance has slightly increased in recent days, capturing some of the flows that could have benefited ETH. This rotation toward BTC during periods of uncertainty is a classic market behavior that confirms the prevailing risk-off sentiment.
Despite this bearish outlook, crypto markets are known for their ability to abruptly reverse trends. A positive catalyst could quickly erase current fears and reignite bullish momentum. Short liquidation levels are accumulating below $3,000, creating potential for a short squeeze if the price bounces firmly from current support levels.
Technological developments around Ethereum continue to advance, particularly regarding scalability improvements and network updates. A major announcement or increased institutional adoption through spot ETFs could serve as a trigger for a surprise rally. Experienced traders therefore maintain bidirectional vigilance, ready to react in either direction.
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