Ethereum’s bullish trend is beginning to show signs of fatigue as it pulls back from the $4,400 resistance zone. Although the mid-term trajectory remains positive, recent bearish divergences and shifts in market structure suggest a weakening in short-term momentum.

The next days will be pivotal in determining if this pullback signifies a healthy correction or the inception of a more significant decline.

Technical Analysis

Daily Chart

On the daily chart, ETH is still within a long-term ascending channel, yet it has again struggled to surpass the $4,800 resistance level. As it retraces towards the channel’s lower trendline and the 100-day moving average, currently at $4,000, the outlook remains uncertain.

The RSI has also dropped back to 49, suggesting that bullish momentum has subsided but is not yet negative. If the price stays above $4,000, the overall trend is likely to hold. However, faltering at this level could lead to a deeper decline towards $3,400, marking the next notable support area.

Daily Chart

4-Hour Chart

Viewing the 4-hour chart, ETH has confirmed a Market Structure Shift (MSS) as it has failed to maintain higher highs around $4,800. The bearish divergence in the RSI corroborates this downward movement, indicating a loss of momentum before the current slump. It seems the price may target the $4,200–$4,100 range, previous demand zones, during this corrective phase.

For buyers to re-establish control, ETH must reclaim $4,500 and negate the formation of recent lower highs. Until that occurs, short-term sentiment remains slightly negative while still within the larger bullish trend.

4-Hour Chart

Sentiment Analysis

Open Interest

Current open interest across exchanges is robust at approximately $28.5 billion, indicating that derivatives traders have substantial positions, despite the recent market pullback. This level of activity implies strong speculative interest but also exposes the market to liquidations if volatility spikes.

Sustained high open interest while prices decrease may activate a series of forced liquidations prior to establishing a more stable lower threshold. Conversely, a gradual reduction in open interest throughout this decline could denote a healthy unwinding of leverage, potentially paving the way for Ethereum’s resurgence.

Open Interest

Disclaimer: The information is sourced from the views presented by the analysts and should not be interpreted as financial advice. Always conduct your own research prior to any investment decision.