Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Ethereum (ETH) is currently consolidating following a notable rejection near the $4,500 resistance level, with technical indicators suggesting a risk of further price pullback if critical support zones fail to hold. The asset’s price action remains indecisive, as bulls attempt to defend key levels amidst a broader defensive market sentiment.
Technical Outlook
Daily Chart Analysis
On the daily timeframe, Ethereum has notably broken below its ascending parallel channel and has lost the upward momentum that had previously pushed it above $4,400. After failing to maintain positions above the lower trendline and the 100-day moving average, positioned around $4,100, ETH is now trading just above the critical $3,500 support zone.
The Relative Strength Index (RSI) on the daily chart remains below 50, signaling a clear lack of underlying strength in the market. Should buyers fail to protect the $3,500 area, the analysis suggests a potential move towards the 200-day moving average at approximately $3,200, and potentially even the $3,000 demand zone.
4-Hour Chart Analysis
Examining the 4-hour chart, ETH has formed a symmetrical triangle pattern directly beneath the key supply zone around $4,200. The asset has recently broken below this triangle and is currently retesting its lower boundary.
Historically, breakouts from such patterns often precede spikes in volatility, particularly if the price experiences a rejection from the lower trendline. A successful break back above $4,000 could propel the price towards the $4,600 resistance, while a definitive breakdown from the current level would bring the $3,500 support into sharper focus. The 4-hour RSI shows a slight recovery but has not yet indicated a strong breakout, leaving the short-term outlook neutral.
On-Chain Data
Exchange Netflow
Ethereum’s exchange netflow data presents a cautiously optimistic picture. Over the past few weeks, the majority of days have recorded significant outflows of ETH from exchanges, indicating that holders are opting to move their assets to private wallets rather than preparing them for sale. This behavior suggests a potential period of accumulation during the current consolidation phase.
However, these outflows have not yet translated into strong price continuation. As long as these outflows persist and there isn’t a spike in panic-driven inflows back to exchanges, the analysis concludes that downside pressure on ETH’s price should remain limited.
