Ethereum Price Analysis: ETH reaches decision point as bearish momentum increases

Ethereum has continued its downtrend and is now trading within a critical multi-month demand block. With liquidity being aggressively flushed above and below price, ETH is approaching a key decision point where a relief or deeper capitulation in the lower demand zones could occur.

Technical Analysis

By Shayan

The daily chart

ETH has continued its sharp corrective trajectory, sliding out of the $3.5K-$3.6K supply zone and breaking decisively below both the 100-day and 200-day moving averages. This breakdown has placed the asset squarely in the $2.7,000 to $2.85,000 demand region, which previously acted as a launching pad for the July breakout.

The daily market structure remains firmly bearish, with a clear sequence of lower highs and lower lows. The descending channel, combined with the failed retest of the 200-day MA, suggests that sellers are still in full control.

The current zone around $2.7K is where the price last rallied before the August rally. A clear loss of this area would expose the next major decision level at $2.45K-$2.55K, where long-term bids previously intervened. On the other hand, any sustainable recovery must begin with a $3K clawback and a close above the 100-day MA to signal a meaningful shift in momentum.

The 4-hour chart

The 4-hour time frame emphasizes the precision of the downtrend. The asset continues to respect the descending trendline emerging from the $4.2K breakdown, and each retest of this trendline has generated new waves of selling. ETH has now reached the lower limit of the descending channel while within the $2.7K demand block.

Short-term liquidity movements have occurred at both sides of the range, indicating increasing volatility and the possible formation of a local bottom. If buyers defend the current low in the channel, the first upside target will be the disequilibrium area between $3.05K and $3.15K, followed by a more significant test of the $3.45K supply area. However, without a clear break above the trend line, a recovery will remain corrective rather than structural.

Onchain analysis

By Shayan

The two-week liquidation heatmap shows that ETH is surrounded by dense liquidation clusters above the current price, especially between $3.1K and $3.6K. These zones reflect the heavy accumulation of short positions and forced exits during the recent decline.

Historically, when prices enter a deep liquidity vacuum among the major clusters, markets often shoot lower before staging a volatile recovery as liquidity above price becomes the next target.

Currently, there are clear liquidity gaps above $3.2K, which corresponds to the large daily gap in fair value. These areas tend to act like magnets during quick corrections. With liquidity compressed below and large unfilled pockets above, ETH is approaching a crucial zone. A temporary capitulation in the lower demand region cannot be ruled out, but this same movement has historically preceded strong recovery phases once exhausted sellers have been cleared.