Ethereum Faces 15% Correction as Buyer Fatigue Sets In

Ethereum (ETH) has recently experienced a significant price correction, breaking below its ascending flag pattern and retracing to retest the broken trendline. This movement has sparked debate among analysts about whether ETH is staging a push toward $2.8K or facing a crash to $2K.

The daily chart analysis indicates that ETH has entered a corrective phase after breaking down from its ascending flag pattern. The cryptocurrency found strong support around the $2.1K level and bounced back toward the broken trendline at $2.4K, where it is currently encountering resistance. The lack of significant volatility and waning momentum around this key level suggests that buyers are exhausted. If selling pressure intensifies, ETH is likely to complete its pullback and extend its correction, with the $2K mark emerging as the next key defensive zone for bulls to regain control.

On the 4-hour chart, ETH initially found strong support within the 0.5–0.618 Fibonacci retracement zone, a historically reliable level during corrections. The sharp reaction from this range led to a quick move upward, but the rally has now stalled at the previous flag’s lower boundary, which currently acts as resistance near $2.4K. This rejection increases the probability of another downward leg unless buyers can swiftly reclaim control. The $2.1K zone, which overlaps with the Fib support, remains a key battleground. As long as this area holds, the market structure retains a bullish bias. If breached, it may pave the way for a deeper decline toward $2,000.

Onchain analysis reveals that the funding rate metric, a crucial gauge of trader sentiment within the futures market, has been declining. This signals waning bullish momentum and potential buyer fatigue, raising the probability of a short-term rejection and deeper corrective movement. However, as funding rates approach the neutral zone near zero, it may suggest a reset in leveraged positions, indicating that the market is cooling off. This environment often precedes renewed demand and could pave the way for a strong bullish continuation once the current consolidation phase concludes.

In summary, Ethereum's price movement is at a critical juncture. The cryptocurrency's recent correction and the decline in funding rates suggest potential buyer fatigue and a higher probability of a deeper corrective movement. However, the $2.1K zone remains a key battleground, and if it holds, the market structure retains a bullish bias. The next few days will be crucial in determining whether ETH stages a push toward $2.8K or faces a crash to $2K.