After a 15% weekly crash, what next for ETH?

Ethereum has once again failed to recover the critical $4K resistance level, leading to a notable price drop. However, the cryptocurrency has now reached a major support zone, where a rally followed by consolidation is expected.

By Shayan

The daily chart

Ethereum’s $4,000 price region has proven to be a critical resistance zone over the past year, consistently halting bullish advances due to strong selling pressure.

More recently, the price faced another rejection at this level, triggering a major sell-off. That drop was further fueled by comments from Federal Reserve Chairman Jerome Powell suggesting the central bank may halt its current policy of cutting key interest rates.

Despite this setback, ETH has found support at the $3,000 level, a crucial price zone, which led to a bounce above the $3,500 threshold. The cryptocurrency is currently consolidating within the $3.5K–$4K range, with expectations of a potential bullish attempt to retest the $4K resistance after this consolidation phase.

Source: TradingView The 4-hour chart

On the 4-hour chart, Ethereum’s rejection of the $4,000 resistance led to a sharp decline, breaking below the ascending wedge pattern, a clear indication of sellers’ dominance. This bearish momentum pushed the price lower, leading to a pullback before resuming its downtrend.

Ethereum is currently trading within a major support zone, defined by Fibonacci retracement levels from 0.5 ($3.2K) to 0.618 ($3K).

This is expected to provide stability in the short to medium term, with the likelihood of continued consolidation and minor pullbacks. If this support holds, buyers may re-enter the market, setting the stage for another attempt to challenge the $4K resistance.

Source: TradingView

By Shayan

Ethereum’s failure to recapture the $4,000 threshold triggered major sell-offs in the futures market, followed by a rapid decline that appears to have substantially cooled broader sentiment.

The chart illustrates the funding rates metric, a reliable indicator of futures market sentiment. Although Ethereum’s aggregate funding rates saw a sharp increase last week, the rejection of $4,000 led to substantial liquidation, bringing funding rates back to levels conducive to an uptrend.

This cooling effect could pave the way for a more sustained rally in the coming weeks. A similar pattern was seen in January 2024, when a sharp drop in funding rates calmed the futures market, setting the stage for Ethereum’s next major impulse rally. This historical precedent suggests that the current market reset could mark the beginning of another bullish phase.

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