Ethereum Risks Correction as $3,400 Support Wavers
Ethereum is showing signs of exhaustion after its sharp rally from $2,800 to the $4,000 zone. On the daily chart, ETH is consolidating below the key $4,000–$4,100 resistance area while defending support around $3,400, which also aligns with the 100-day moving average. A decisive break above $3,800 could set the stage for testing the 2024 high at $4,100. Conversely, losing the $3,400 level may trigger a deeper pullback towards $2,800.
On the 4-hour timeframe, Ethereum has been rejected twice near $3,700, forming equal highs and a possible lower high–lower low pattern. The local demand zone at $3,500 remains critical; a drop below this level could open the door to $3,300 and lower. On the upside, reclaiming $3,700 would likely pave the way to $3,900 and potentially back to $4,100.
Open interest in ETH derivatives peaked near $28 billion as prices neared $3,800 and has since eased slightly, indicating reduced leverage during consolidation. While the broader trend remains bullish, traders should watch key support and resistance levels for signs of a deeper correction or renewed upside momentum.
Bearish
The analysis highlights multiple exhaustion signs and the risk of a pullback as Ethereum struggles with key resistance at $3,700–$4,000 and teeters on the $3,400 support. A break below this critical level could lead to a deeper correction toward $2,800. Declining open interest during consolidation suggests traders are reducing leverage, increasing the likelihood of downward momentum. Historically, similar rallies followed by equal‐high patterns and lower highs on shorter timeframes have preceded notable corrections. In the short term, this setup points to bearish pressure as stops may trigger beneath support zones. In the longer term, Ethereum’s structure remains intact above the 100-day moving average, but traders should watch for a confirmed rebound above $3,700 or signs of sustained selling below $3,400.