Ethereum continues to trade inside a deeply compressed downtrend, with repeated rejections from lower-high resistance. While the broader structure remains bearish, signs of sell-side exhaustion and deep liquidity pockets above the price keep the door open for a relief expansion if buyers reclaim key levels.
Technical Analysis
The Daily Chart
Ethereum has extended its decline within a persistent descending channel, repeatedly failing to break above the 100-day and 200-day moving averages, both of which have now turned into dynamic resistance. The most recent rejection from the $3.8K supply cluster confirms the dominance of sellers in the upper half of the structure.
The asset has now stabilized directly inside the $3K–$3.1K demand block. This region has historically attracted medium-term buyers and is reinforced by a visible positive divergence in the RSI, indicating a slowdown in bearish momentum. However, unless the price reclaims the $3.45K–$3.55K breaker block, the market remains vulnerable to continued pressure toward the deeper $2.6K demand zone.
If a daily close returns above the broken trendline and the 200-day MA, the broader structure could shift, opening the path for a mid-trend recovery toward the $3.8K liquidity band.
The 4-Hour Chart
On the 4H timeframe, ETH continues to move within a sharp falling wedge. Each attempt to break higher has been rejected at the descending trendline and at the aligned $3.55K and $3.8K supply zones. These stacked supply layers have repeatedly capped upside attempts.
The price is now trading close to the wedge’s lower boundary and just above the main liquidity pool spanning the $3K zone. The presence of long downside wicks indicates aggressive buyer absorption, matching the corrective nature of the wedge. If Ethereum manages to reclaim the $3.35K intraday pivot, a short-term shift toward the $3.55K region becomes likely.
Failure at this midpoint would keep the falling-wedge continuation intact and sustain the probability of a retest of $3K or even a brief deviation below it before any meaningful reversal.
On-Chain Analysis
The two-week liquidation heatmap highlights a dense concentration of resting long liquidations overhead, especially between $3.6K and $3.9K. This bright cluster is the primary liquidity magnet for any upward expansion. Historically, Ethereum tends to gravitate toward these high-liquidity shelves when the market enters a short-term relief phase.
Below the price, the liquidity is far thinner, meaning any downward continuation is likely to be sharp but short-lived, driven more by stop-runs than sustained selling. The largest imbalance sits at $3.8K–$3.9K, suggesting that if Ethereum manages to reclaim structure at $3.45K, a swift squeeze into that band becomes the most probable scenario.
