After a 15% weekly drop, what's next for ETH?

ethereum once again failed to regain the critical $4,000 resistance level, causing a notable drop in price. However, the cryptocurrency has now reached an important support zone, where a rebound 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 significant sell-off. This drop was further fueled by comments from Federal Reserve Chair Jerome Powell suggesting that the central bank could pause its current policy of lowering key interest rates.

Despite this setback, eth has found support at the $3,000 level, a crucial price zone, leading to a bounce above the $3,500 threshold. Currently, the cryptocurrency is consolidating within the $3,500 to $4,000 range, with expectations of a possible bullish attempt to retest the $4,000 resistance after this consolidation phase.

The 4 hour chart

On the 4-hour chart, ethereum's rejection at the $4,000 resistance triggered a sharp decline, breaking below the rising wedge pattern, a clear indication of sellers' dominance. This bearish momentum pushed the price lower, causing a pullback before resuming its downtrend.

Currently, ethereum is trading within a significant support zone, defined by the Fibonacci retracement levels of 0.5 ($3,200) –0.618 ($3,000).

This is expected to provide stability in the short and 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 $4,000 resistance.

By shayan

ethereum's failure to reclaim the $4,000 threshold triggered major sell-offs in the futures market, followed by a flash crash that appears to have substantially cooled broader sentiment.

The chart illustrates the funding rates metric, a reliable indicator of futures market sentiment. While aggregate ethereum funding rates saw a sharp rise last week, the rejection of $4,000 sparked substantial sell-offs, bringing funding rates back to levels conducive to an uptrend.

This cooling effect could pave the way for a more sustainable rally in the coming weeks. A similar pattern was observed in January 2024, when a sharp drop in funding rates calmed the futures market, setting the stage for ethereum's next big impulsive rally. This historical precedent suggests that the current market reset could mark the beginning of another bullish phase.

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