Ethereum News Today: Ethereum Dips 3.96% as Bearish Indicators Signal 12.83% Drop to $3,186.61

Ethereum’s recent price action has drawn renewed bearish attention following a sharp correction from resistance levels. The cryptocurrency fell 3.96% to $3,600.29 after struggling to break through the $3,750–$3,766 range, where traders initiated partial profit-taking [1]. A red candle forming near the $4,000 psychological resistance has intensified selling pressure, with a “Selling 10%” zone identified just below the $3,750 level. Technical indicators suggest heightened downside risks: a rising wedge pattern, characterized by declining highs, and bearish RSI divergence (price making higher highs while RSI forms lower highs) signal weakening bullish momentum. This divergence could lead to a projected 12.83% decline, potentially pushing ETH to $3,186.61 [1].

The $3,500 support level has become a critical battleground for near-term bulls. Historically, this zone has acted as a confirmed support after previous rebounds, including the May 2023 breakout that drove ETH past $2,800. Maintaining control above $3,500 is essential for a potential retest of the $4,000 target. However, a break below this level could trigger cascading declines toward $3,200, $2,630.16, and even $2,233.80 [1]. Analysts highlight that liquidity pools below $3,800 remain vulnerable to being swept by selling pressure, amplifying risks for further bearish moves.

Michael van de Poppe, a notable analyst, emphasized the significance of a $3,800 breakout, warning that failure to breach this resistance could force ETH toward $3,400. The wedge structure—defined by consecutive lower highs since the $3,715 peak—supports this outlook, as does the presence of a red supply zone between $3,700 and $3,800 that has repeatedly stalled upward momentum [1]. Without a sustained rally above $3,800, the asset may struggle to regain confidence, with liquidity in that range offering a magnet for renewed selling.

The immediate technical outlook hinges on two key price points: $3,500 for support and $3,800 for resistance. A failure to defend $3,500 would invalidate the current bullish case, exposing deeper demand zones below $3,200. Conversely, a breakout above $3,800 could reignite optimism, though analysts caution that such a move must be accompanied by robust volume and RSI alignment to confirm sustainability. Market participants remain divided, with bears leveraging the wedge pattern and RSI divergence to anticipate further declines, while bulls cling to the $3,500 level as a gateway to retesting critical resistance [1].

Source: [1] [Ethereum Bulls Aim for $4K as $3.5K Support Holds Despite Rejection at $3.8K Level] [https://cryptofrontnews.com/ethereum-bulls-aim-for-4k-as-3-5k-support-holds-despite-rejection-at-3-8k-level/]