Is Ethereum's $4,000 Support a Death Cross for Bulls?

Ethereum (ETH) has long been a barometer for the broader crypto market, and its recent price action around the $4,000 level has sparked intense debate. While bullish fundamentals suggest resilience, technical indicators paint a conflicting picture. This article examines the divergence between Ethereum's on-chain strength and bearish chart patterns, asking whether the $4,000 support level marks a turning point-or a trap-for bulls.

Technical Bearish Signals: The Death Cross and Market Sentiment

Ethereum's price has recently fallen below the $4,000 support level, a development analysts describe as a "classic bear trap" according to a Yahoo Finance report. This decline coincided with the potential confirmation of a death cross, a bearish technical signal where the 50-day simple moving average (SMA) crosses below the 200-day SMA. As of late October 2025, Ethereum had already lost its 200-day SMA, a critical support level that had acted as a dynamic floor since February 2025, as a U.Today report notes. The RSI indicator has also dipped below 35, signaling oversold conditions and growing bearish momentum, as the U.Today report notes.

The death cross, historically associated with prolonged downturns, could trigger further selling pressure. If confirmed, Ethereum's price may face a test of the $2,200–$2,000 range, a key accumulation zone for long-term investors, as the U.Today report notes. Short-term traders are now watching whether bulls can defend the $3,500–$3,600 range, which previously acted as resistance, according to the U.Today report. Meanwhile, Ethereum ETF outflows have exacerbated bearish sentiment, with a $135.7 million net outflow recorded on October 29, including $81.7 million attributed to BlackRock, as a Coincu analysis notes.

Fundamental Bullish Divergence: Staking, TVL, and Institutional Demand

Despite the technical headwinds, Ethereum's fundamentals remain robust. Total value locked (TVL) in Ethereum protocols has surged to $90 billion, reflecting a 5% 24-hour increase, according to a Coinotag analysis. This growth underscores renewed confidence in decentralized finance (DeFi) and Ethereum's role as a settlement layer. Additionally, stablecoin supply has exceeded $162 billion, signaling strong liquidity inflows, as the Coinotag analysis notes.

On the supply side, Ethereum's staking activity has hit record levels. Over 160,000 ETH has been staked since October's crash, with total value staked approaching an all-time high of 36.19 million ETH, according to the Coinotag analysis. Institutional demand further reinforces the bullish narrative: SharpLink's $78.3 million ETH purchase at $4,062 highlights capital inflows from large players, as the Coinotag analysis notes. Ethereum's market dominance has also climbed to 13.2%, as Bitcoin's share declines, indicating a shift in capital toward ETH, according to the Coinotag analysis.

The Divergence: Can Bulls Overcome the Death Cross?

The tension between Ethereum's technical and fundamental indicators creates a unique scenario. While the death cross and bear trap suggest a near-term downtrend, the surge in TVL, staking, and institutional buying points to a resilient ecosystem. Analysts like Tom Lee argue that Ethereum's fundamentals-tightening supply and increasing demand-could drive the price toward $5,000, as the Coinotag analysis notes. However, this optimism clashes with technical bearish signals, including the death cross and ETF outflows, as the Coinotag analysis notes.

A critical factor will be Ethereum's ability to retest and hold above $4,000. A successful rebound could trigger a bullish flag pattern, with price targets as high as $11,500, as the Coincu analysis notes. Conversely, a breakdown below $3,500 may confirm the death cross and accelerate the descent toward $2,000, as the Coincu analysis notes.

Conclusion: Navigating the Divergence

Ethereum's $4,000 support level is a battleground between technical bearishness and fundamental optimism. While the death cross and ETF outflows signal caution, the surge in TVL, staking, and institutional demand suggests Ethereum's long-term trajectory remains intact. Investors must weigh these conflicting signals carefully. For now, the market is in a holding pattern, with the next few weeks likely to determine whether the $4,000 level becomes a catalyst for recovery-or a precursor to a deeper correction.