Ethereum remains in a corrective trading environment, oscillating between clearly defined support and resistance levels. Although the market has made attempts at recovery, it continues to be structurally weak, indicating that the current phase resembles consolidation and distribution rather than a solid bullish trend.

Technical Analysis

The Daily Chart

On the daily chart, ETH is under a descending trendline that has influenced its broader corrective stance since reaching its recent peak. Every effort to regain higher prices has faced selling pressure, affirming the trendline’s role as a significant dynamic resistance. Additionally, trading below both medium and long-term moving averages heightens the risk for corrective rather than impulsive rallies.

The immediate resistance is seen around the $3.4K to $3.6K zone, where prior breakdowns occurred, coinciding with the descending trendline and past consolidation areas. Should Ethereum fail to stabilize above this region, it risks further decline. Meanwhile, the $2.6K to $2.8K area may act as the first substantial demand zone, but it seems more like a temporary halt rather than a conclusive cycle low.

4 Hour Chart

The 4-Hour Chart

In the 4-hour frame, ETH is currently trading within a rising corrective channel, part of a broader downtrend. Although this channel has facilitated short-term recoveries, it does not alter the prevailing bearish bias on higher time frames. The formation of lower highs under the descending trendline signifies weak upward momentum, and recent rejections at channel resistance suggest that buying efforts lack momentum.

A definitive breakdown beneath the lower channel boundary has initiated downside momentum, paving the way for potential movements toward deeper demand zones.

Sentiment Analysis

The annual Ethereum liquidation heatmap highlights a crucial liquidity pool near the $2K mark. This cluster has remained mostly untouched over time and could serve to draw market activity, especially in corrective phases, indicating a real risk of a price drop towards this threshold before establishing a robust bullish structure.

Overall, Ethereum’s market remains vulnerable while it trades below significant resistance levels, with liquidation metrics hinting at the possibility of deeper corrective moves. A slip towards the $2K liquidity area could harmonize with both technical and on-chain factors, possibly necessary for Ethereum’s evolution into a healthier bullish cycle.