Here are the next most likely targets for ETH: Ethereum Price Analysis

Ethereum’s recent attempt to break the average threshold of the multi-month descending channel of $2.6K has turned out to be a false breakout, leading to a notable rejection and a sharp decline.

This pattern suggests a possible mid-term continuation of the downtrend towards the $2.1k support level.

By Shayan

The daily chart

Ethereum price action on the daily chart has highlighted a bullish trap. Just like in late August, when ETH broke above the average threshold of the descending channel only to be quickly rejected, a similar pattern has played out recently.

After the price briefly broke above the $2.6K resistance, it was unable to sustain the momentum and faced considerable selling pressure, resulting in a 15% decline. This failure to set a higher high indicates the dominance of the sellers in the market.

Now, the cryptocurrency is approaching a crucial support zone around $2.1 thousand, which aligns with a previous major swing. It looks likely to enter a downward consolidation phase in the medium term, gradually declining towards this key level.

Source: TradingView The 4-hour chart

On the 4-hour chart, Ethereum’s inability to sustain upward momentum near Fibonacci levels 0.5 ($2.6K) – 0.618 ($2.8K) triggered a three-way bearish pattern units

This familiar reversal pattern and a bearish divergence between price and the RSI suggested that sellers were regaining control of the market. As a result, Ethereum experienced a sharp decline, retreating towards the lower limit of the ascending flag of $2.3 thousand.

Sellers are currently aiming to push the price of Ethereum below the lower limit of the flag, which would likely start a new downtrend. If this breakout to the downside occurs, the next major target for ETH would be the $2,000 psychological support. However, the $2.1K threshold remains the first line of defense for buyers.

Source: TradingView

By Shayan

This analysis focuses on the 50-day moving average of Ethereum funding rates, which provides a clearer picture of the broader sentiment in the futures market.

Recently, ETH’s 50-day moving average funding rate has been steadily declining, reaching its lowest level in 2024. This persistent downtrend highlights bearish sentiment among futures traders, indicating a general lack of buying interest in the market. These conditions are usually related to falling prices as short sellers dominate the market.

For Ethereum to recover and rise to higher price levels, demand in the perpetual futures market must increase. The continued decline in funding rates suggests that selling pressure is more aggressive than buying interest, reflecting low expectations for ETH in the medium term.

Although negative financing rates are generally associated with low conditions, they can sometimes indicate a potential market reversal.

This happens through short liquidation cascades, where aggressive short positions are liquidated, causing a rapid rise in price. For this to happen, however, substantial buying pressure from the spot market needs to support a rally.

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