Ethereum News Today: Ethereum's $3,800 Resistance and Bearish Divergence Signal 12.83% Drop Risk

Ethereum’s price action on July 24, 2025, has drawn heightened attention as the cryptocurrency encounters resistance near $3,800, a level marked by bearish technical signals. The formation of a rising wedge pattern—a classic indicator of potential reversals—has emerged after ETH failed to surpass the $3,800 threshold despite reaching $3,715. This pattern, coupled with bearish divergence on the Relative Strength Index (RSI), suggests weakening upward momentum [1]. The price has formed lower highs and higher lows within the $3,700–$3,800 range, creating a red supply area that has capped further gains. Analysts warn that a 12.83% decline could target $3,186.61 if the wedge completes, with a liquidity pool exacerbating downward pressure if triggered [1].

The $3,500 support level has become a critical battleground for bulls. Historically, this level was a breakout threshold during Ethereum’s previous rally from $2,400 to $2,800, now acting as a psychological barrier. A breakdown below $3,500 could expose deeper support zones at $3,200, $2,630.16, and potentially $2,233.80 [1]. Conversely, holding above $3,500 would allow a retest of the $4,000 target, though this depends on resolving the $3,800 resistance. Market strategist Michael van de Poppe emphasized that a decisive breakout above $3,800 is essential to sustain bullish momentum, warning that failure to do so could lead to a correction toward $3,400 [1].

On-chain metrics paint a mixed picture. While funding rates on major exchanges have turned positive, reflecting speculative demand for long positions, they remain below historical extremes seen at prior market tops. Open interest and institutional positioning are closely monitored, as rapid increases in funding rates could signal overheating. Meanwhile, Ethereum’s ecosystem has seen reduced activity in altcoins linked to the network, such as layer-2 solutions and DeFi tokens, indicating a temporary shift in investor focus [1].

Cross-chain dynamics introduce additional uncertainty. Bitcoin’s consolidation phase has complicated Ethereum’s trajectory, with analysts divided on whether the current phase represents a “healthy consolidation” or a precursor to a deeper correction. If bulls reassert control above $4,000, the trajectory could mirror prior ETF-driven Bitcoin rallies. Conversely, bear dominance in the $3,200–$3,500 range may signal a broader market reassessment [1].

Market participants remain split. Some predict Ethereum’s rally, fueled by spot ETF inflows and rising staking yields, could extend beyond $4,000. Others caution that overbought conditions may lead to a short-term pullback. A July 23 update noted Ethereum briefly dipping to $3,698.10 after a 1.94% 24-hour decline, reinforcing the $3,500–$3,800 consolidation range [3]. Traders are advised to monitor volume patterns and candlestick strength for confirmation of either a breakout or breakdown.

The coming days will likely see increased scrutiny on institutional activity and on-chain liquidity shifts. A sustained close above $3,800 would validate the continuation of the rally, whereas a drop below $3,500 could amplify bearish pressures, testing the $3,500 psychological barrier [1].

Source:

[1] [Ethereum Price Analysis: ETH Rally Cools, Can it Dodge a Major Correction?] [https://www.coinrank.io/], [Ethereum Price Analysis: ETH Rally Cools, Can it Dodge a Major Correction?] [https://coinmarketcap.com/community/articles/6880e62c6671d3258eca325f/].

[2] [Ethereum Price Prediction: ETH Price in 2025,2026,2027] [https://coindcx.com/blog/price-predictions/ethereum-price-weekly/].

[3] [DevvStream Shifts Focus to BTC and SOL Treasury] [https://m.economictimes.com/crypto-news-today-live-22-jul-2025/liveblog/122821149.cms].