Ethereum Faces Critical Technical Test
Ethereum is currently trading around $3,130, which represents an 11% drop over the past day and a 4% decline for the week. The cryptocurrency is now testing what analysts consider a crucial technical level—the weekly 50 EMA. This particular zone, roughly between $3,200 and $3,500, previously served as resistance for more than a year. Now it’s being tested from the support side, making this a pivotal moment for Ethereum’s price direction.
One trader, Merlijn The Trader, described the situation as “make or break,” suggesting that holding this level could maintain momentum while losing it might lead to further declines. The price action here seems to be determining whether Ethereum stays within its broader trend structure or if sellers regain control.
Trading Range and Market Indicators
Ethereum has been moving within a relatively narrow range on the daily chart, bouncing between $3,350 and $3,675. It’s currently caught between the 200-day EMA near $3,590 and the 200-day moving average around $3,355. This range has held for multiple trading sessions without any clear directional breakout.
Daan Crypto Trades noted that breaking outside this range “should lead to another 5%+ move,” but emphasized that only a clean break—not just a temporary wick—would confirm the direction. Until that happens, Ethereum remains confined between these two significant long-term moving averages.
Potential Double Bottom Formation
There’s some discussion among analysts about a potential double bottom pattern forming near the $3,100–$3,200 area. This comes after Ethereum experienced approximately a 36% correction from its recent highs. GalaxyBTC pointed out that this setup resembles a pattern seen in 2020, when Ethereum bounced from a similar double bottom and began a substantial rally.
If this pattern holds, it might suggest that the 2020 pattern is still relevant. However, failure to maintain support at these levels could invalidate this comparison and shift expectations toward further downside movement. The recent price action from all-time highs to just above $3,100 matches the scale of that earlier pullback.
Market Sentiment and On-Chain Activity
CryptoWZRD observed that Ethereum closed the day in what they described as a bearish position, warning that additional weakness remains possible. They noted that ETH/BTC is approaching a support level and that “a strong bullish reversal is necessary” to prevent continued pressure. The possibility of a drop to $2,800 remains if the price fails to recover.
Short-term support appears to be around $3,230, while resistance sits near $3,640. Without stronger moves from Bitcoin, Ethereum might continue trading within this range or potentially move lower.
Interestingly, on-chain data shows large Ethereum wallets withdrawing funds from Binance, which has reduced the available exchange supply. This activity might indicate long-term positioning by major holders, as fewer coins remain readily available for selling. This could potentially provide some underlying support, though it’s difficult to say how much impact this will have on short-term price action.
The overall picture suggests Ethereum is at a critical juncture. The technical indicators are mixed, with some pointing to potential support while others suggest further downside risk. Market participants seem to be watching these key levels closely, waiting for clearer directional signals before making significant moves.
