Ethereum continues its correction phase after failing to maintain momentum above $4,200. Market sentiment remains cautious as ETH trades around $3,700, showing weakness both technically and sentimentally. Buyers are seemingly losing control and attention now shifts to the key support zones below.
Technical analysis
By Shayan
The daily chart
On the daily chart, ETH has broken below the long-term ascending channel structure and the 100-day moving average, located around the $4,100 mark. The price is currently moving towards the 0.5 Fibonacci retracement level at $3,530. This zone is a critical area that previously acted as support and is the basis of the most recent rally in August.
The RSI around 37 indicates bearish momentum, but it has not yet reached oversold territory, implying that further declines are still possible. A clean break below $3,500 could open the way towards the 0.618 retracement level at $3,200, while reclaiming the last price high around $4,200 would be the first sign of recovery.
The 4 hour chart
The 4-hour chart shows clear bearish order flow as the downtrend worsens after losing the $4,200 level and failing to regain it. The recent rejection from this zone has confirmed a bearish turn in the short-term market structure.
Momentum remains weak with the RSI near 33, suggesting that sellers still dominate. The next demand zone lies between $3,500 and $3,400, where buyers recently held firm during the sell-off event. However, failure to hold this level could accelerate the move towards $3,200 or even $3,000 in a deeper decline.
Sentiment analysis
Long settlements
The latest Ethereum crash caused a notable spike in long liquidations across all exchanges, marking one of the biggest deleveraging events in recent months. This increase in forced selling reflects how overconfident long-term traders were caught off guard by the rapid market reversal.
Historically, these liquidation spikes typically appear near local lows as leveraged positions are eliminated. However, the magnitude of this latest move suggests panic among retail traders, while institutions are likely waiting for clearer confirmation before jumping back in.
Overall, sentiment remains fearful and risk-averse, with traders preferring caution over aggressive long exposure in the short term.
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