Rising FOMO in Ethereum Sparks Sell Signal After $3,500 Bounce
Ethereum traders have rapidly shifted from extreme bearishness to bullishness as ETH neared $3,500, driven by a surge in FOMO. Analytics platform Santiment indicates that such euphoric sentiment historically precedes price declines, noting that neutral phases offer stronger buy signals. Crypto trader Ted Pillows adds that the recent rebound lacks conviction, fueled mainly by short-position closures rather than fresh spot buying, and warns that Ethereum must reclaim the $3,600-$3,700 resistance zone with significant inflows to confirm strength. On the monthly chart, “Trader Tradigrade” identifies a potential Inverse Head and Shoulders pattern that, if confirmed, could target $14,000. Meanwhile, Galaxy CEO Mike Novogratz views current price weakness as a “wet blanket” caused by long-term holders rebalancing portfolios. He anticipates a more dovish Fed under a new chair by year-end, potentially triggering the next bullish leg for Ethereum.
Bearish
Santiment’s data and historical patterns show that extreme bullish sentiment in Ethereum typically precedes price pullbacks. The current rebound is driven primarily by short-covering rather than fresh spot buying, suggesting weak conviction. Failure to decisively reclaim the $3,600–$3,700 resistance zone would likely trigger renewed selling, mirroring past events when euphoria led to rapid reversals. Although a long-term inverse head and shoulders pattern could point to higher targets, it remains unconfirmed. In the short term, rebalancing by long-term holders and lack of significant inflows add downward pressure, making a bearish outcome the more probable near-term scenario.