Ethereum Price Analysis: ETH Tests Crucial Support Amid Increasing Selling Pressure

Ethereum has extended its decline into a higher-frame critical demand zone around $3K. While the broader trend remains under pressure, the current location aligns with major sources of liquidity and potential areas of interest for major players.

A decisive response here will determine whether ETH enters a relief phase or continues to deepen towards macro demand levels.

Technical Analysis

By Shayan

The daily chart

Ethereum continues to decline within a broad descending structure, steadily approaching the $3K-$3.05K demand block that previously served as a springboard for the July-August rally. This area also closely aligns with the lower boundary of the falling wedge, a pattern typically associated with late correction phases rather than trend initiation.

The inability to reclaim the 100-day moving average to $3.8k led to a continued sell-off, with the 200-day MA now positioned above the price for the first time since early summer. This shift reflects weakening medium-term momentum, but the clustering of confluence factors around the $3K zone suggests that sellers may soon face declining dominance.

The current daily candle bodies remain compressed, with extended wicks down, indicating absorption near the demand threshold. Should Ethereum stabilize and form a higher low structure within this region, a corrective phase towards $3.4K-$3.55K becomes plausible. However, a daily close below $2.95K would negate wedge support and expose the broader macro demand zone between $2.6K and $2.7K.

The 4-hour chart

On the lower time frame, Ethereum moves within a well-defined descending channel, with each successive lower high showing weakening volatility. The most recent swing low pushed below the mid-channel liquidity cluster before reversing sharply, a classic liquidity wave that often precedes short-term relief rallies.

The $3,000 – $3,100 level has now been tested several times and forms an almost textbook reaction zone where algorithmic activity is typically concentrated. Above the price is a newly created imbalance window of $3.25K-$3.33K, which could act like a magnet if buyers get a corrective push.

Nevertheless, the structure remains firmly bearish until Ethereum can reclaim the channel centerline near $3.35K. Failure to do so would maintain the downtrend and increase the likelihood that we will dive deeper into the liquidity band, closer to $2.9K.

Onchain analysis

By Shayan

The Ethereum Futures Average Order Size chart reveals a major behavioral change beneath the surface of the recent decline. During the latest pullback from $4.1k to $3k, the composition of order flow has shifted to a cluster of smaller, retail-driven orders, while large-scale executions have noticeably thinned out.

This configuration resembles earlier phases where retail capitulation formed near-cyclical lows and larger market participants piled in during structurally reduced price zones. While there has not yet been a clear increase in the number of whale-sized futures orders, the absence of aggressive selling by large hands suggests that the current downturn may be more a result of forced liquidation pressures than deliberate institutional distribution.

This interpretation is consistent with the futures liquidation heatmap, which shows a dense band of liquidations absorbed around $3,000. Historically, such concentrated eradications often precede a temporary structural recovery as excess debt is eliminated.

If Ethereum can defend the current demand region and spot flows begin to reflect larger sized orders, the setup would resemble the early formation of a base before a broader corrective upswing. However, if this region finally breaks through, the next meaningful liquidity concentration will be significantly lower, implying that the market has not yet completed the deleveraging phase.