Ethereum at a Pivotal Inflection Point: Can the $3,935 Breakout Confirm a Trend Reversal?

Ethereum (ETH) stands at a critical juncture as it tests the $3,935 level-a key technical and psychological threshold that could signal a broader trend reversal. With the cryptocurrency trading near $3,446 in late November 2025, market participants are closely monitoring whether ETH can reclaim its rising trendline, which had supported price action since April 2024, according to a The Bit Journal analysis. A sustained close above $3,935 would not only flip the Supertrend indicator to bullish but also validate a potential breakout toward $4,400–$4,800, as noted in the same The Bit Journal analysis. This analysis examines technical and on-chain momentum to assess the credibility of this reversal.

Technical Indicators: A Mixed but Constructive Signal

Ethereum's price action around $3,935 reveals a tug-of-war between bearish exhaustion and emerging bullish momentum. The 50-day EMA currently sits at $3,935, acting as both a dynamic support level and a psychological benchmark, as noted in the The Bit Journal analysis. Derivatives data shows open interest has surged by 4.15% to $39.83 billion, reflecting renewed speculative demand, according to the The Bit Journal analysis. Meanwhile, intraday momentum appears constructive: ETH has held above its volume-weighted average price (VWAP) and formed higher lows, suggesting buyers are stepping in on dips, as noted in the The Bit Journal analysis.

A critical technical catalyst emerged in the form of a monthly MACD crossover after a three-year consolidation period-a pattern historically associated with significant price surges. Traders are drawing parallels to the 2020–2021 ETH rally, which propelled the asset from below $400 to $4,800, as noted in a Reddit post. While the RSI remains neutral at 52, the flattening MACD histogram and retesting of the $3,650–$4,000 range indicate a potential inflection point, as noted in the Reddit post.

On-Chain Momentum: Undervaluation and Institutional Confidence

On-chain metrics further bolster the case for a trend reversal. The Ethereum Network Value to Transaction (NVT) ratio has hit an all-time low, suggesting the network is undervalued relative to its transaction volume, according to a Holder.io report. Historically, such low NVT levels have preceded bullish cycles, as they imply strong usage despite discounted valuations. This divergence between on-chain activity and price could signal a buying opportunity.

Miner balances and active addresses also highlight growing resilience. Despite a 25% quarterly price decline that pushed ETH to a three-month low of $3,097, according to a NewsBTC report, institutional staking activity and ETF inflows have offset bearish pressure. U.S. spot ETH ETFs recorded $12.5 million in inflows on November 6, 2025, while declining exchange supply suggests reduced selling pressure, according to the NewsBTC report. Additionally, a high-profile whale opened a $138 million long position, signaling institutional confidence in a potential rebound, as reported in a CoinEdition analysis.

Institutional and Market Sentiment: A Tipping Point?

The interplay between technical and on-chain signals is further reinforced by macro-level trends. While spot ETF outflows totaled $719 million over five consecutive days, as noted in a Sherwood News report, Ethereum treasury firms with mNAV ratios below 1 are now selling to normalize discounts, creating short-term volatility. However, this selling pressure appears to be waning as ETH stabilizes above key moving averages (20, 50, 100, 200-day EMAs), as noted in the Reddit post.

Analysts project a potential rebound toward $5,000 by year-end if ETH reclaims $3,900, supported by declining exchange supply and renewed institutional demand, according to the NewsBTC report. The $3,200–$3,350 range has already shown bearish exhaustion, with RSI (46) and MACD (negative but flattening) hinting at a near-term bottom, according to the NewsBTC report.

Conclusion: A High-Stakes Technical and On-Chain Test

Ethereum's $3,935 breakout represents a pivotal inflection point. Technically, a close above this level would confirm a trend reversal, while on-chain metrics like the NVT ratio and institutional staking activity suggest undervaluation and growing resilience. However, the market remains vulnerable to a breakdown below $3,300, which would reinforce bearish momentum. For now, the balance of evidence tilts toward a bullish scenario, provided ETH can sustain above $3,935 and retest the $4,450 resistance level, as noted in the Reddit post.

Investors should monitor open interest, NVT divergence, and institutional positioning as key confirmatory signals. If the technical and on-chain narratives align, Ethereum could mirror its 2020–2021 surge and challenge $4,800 in the coming months.