Pullback Tests Key Support Levels
Ethereum is currently trading around $4,200 after experiencing a significant decline from recent highs near $4,950. This correction represents nearly a 20% drop from the peak, which has naturally caught the attention of market participants. The price action is now testing what many consider to be crucial support zones.
Market analyst Michaël van de Poppe suggests Ethereum might be entering a sideways consolidation phase. He notes that the 20-week moving average is converging with the current price level, indicating potential compression in the market. “I don’t know whether we’ll dip as deep as $3,550–$3,750,” he commented, leaving room for further downward movement while acknowledging the uncertainty.
The $4,100 level appears to be holding as immediate support, but traders are watching the broader zone between $3,550 and $3,750 more closely. This area aligns with historical breakout levels and the rising 20-week moving average. Further down, around $2,800, there’s another consolidation area that has served as support in the past.
Technical Patterns Suggest Potential Moves
Trader Tardigrade points to a falling wedge pattern that’s nearing its apex. This technical formation typically precedes breakout moves, and if Ethereum can break above the wedge resistance, it could potentially target levels around $6,800. The pattern shows the asset trending within two downward-sloping lines, with the price currently testing previous breakout areas.
Another perspective comes from Merlijn The Trader, who applies the Wyckoff model to Ethereum’s price action. According to this analysis, ETH may have completed its Spring, Test, and Sign of Strength phases. The current position is labeled as the Last Point of Support, which often precedes stronger upward momentum. “This is where Ethereum accelerates into five digits,” he noted, though I think we should approach such predictions with caution.
Historical Q4 Performance Comparisons
Ethereum has demonstrated strong fourth-quarter performance during previous bull markets. In 2017, the asset gained over 140% in Q4 alone, while 2020 saw returns exceeding 100%. This year’s pattern shows some similarities – after a difficult first quarter with a -45.41% decline, Ethereum recovered with gains of 36.48% in Q2 and 79.55% in Q3.
Crypto Rand recently highlighted these historical parallels, asking whether Ethereum might be preparing for a repeat performance. The comparison seems reasonable given the rebound pattern and typical seasonal strength, but past performance doesn’t guarantee future results. Market conditions today are quite different from 2017 or 2020, with different regulatory environments and institutional participation.
The volume profile in recent weeks shows declining activity, which sometimes precedes more directional moves. Areas marked as “liquidity taken” around $3,900 and potential liquidity zones near $2,800 suggest that if price revisits these levels, we might see significant reactions from market participants.
While the setup appears promising for Ethereum bulls, I’m reminded that technical analysis provides probabilities rather than certainties. The convergence of multiple indicators – historical seasonality, technical patterns, and key support levels – does create an interesting backdrop for Q4. But markets have a way of surprising even the most experienced analysts, so perhaps we should watch how price behaves around these critical levels rather than making bold predictions.
