Ethereum Slides 6% as Bears Regain Control; $4,000 Looms
Ethereum (ETH) has experienced a significant downturn, shedding 6.1% of its value in the past 24 hours and dipping below the crucial $4,300 mark. This decline comes after bulls failed to sustain momentum above the key $4,500 resistance zone, signaling a potential shift in market sentiment despite recent institutional interest.
Institutional Buying Meets Market Weakness
The recent price slide occurs despite fresh institutional buying, highlighted by BitMine's acquisition of approximately $84 million worth of ETH in just 24 hours, increasing its holdings to over 2.15 million coins. This aggressive accumulation points to growing long-term institutional adoption. However, short-term traders appear to be in a "fade-the-rally" mode, consistently selling into any upward movement. Following the U.S. Federal Reserve's announcement of a 25 basis-point rate cut and hints of a softer policy path for 2025, Ethereum initially surged past $4,600, only to quickly lose momentum as large holders cashed in unrealized profits, reminiscent of levels last seen in 2021. On-chain data further reinforces this cautious outlook, with ETH moving from staking contracts to centralized exchanges, suggesting whales are preparing for potential volatility. Subdued network fees also indicate reduced on-chain demand, underscoring bearish short-term sentiment.
Technical Indicators Signal Further Downside Potential
From a technical standpoint, Ethereum's price action has turned negative, breaking below both its 50-SMA ($4,502) and 200-SMA ($4,396) on the two-hour chart. Analysts note a bearish Marubozu candlestick pattern, often a precursor to further declines. The Relative Strength Index (RSI) has plummeted to near oversold levels around 18, suggesting that while conditions are stretched, a bullish reversal is not yet confirmed. Immediate downside targets are identified at $4,242, $4,159, and potentially $4,065 if selling pressure persists. A retest of the $4,395-$4,502 range is anticipated, and failure to reclaim this band could pave the way for a drop towards the psychological support level of $4,000. For bulls to regain control, a decisive move above $4,502 is necessary to target $4,588 and $4,699. Until then, rallies are largely viewed as opportunities for shorting.
Broader Market and Future Outlook
While short-term weakness prevails, the underlying institutional accumulation still supports Ethereum's long-term growth narrative. The broader crypto market reflects this fragility, with Bitcoin currently hovering around $114,000 and other major altcoins like XRP, Solana, and Dogecoin also experiencing declines. The upcoming week's market movements are expected to be significantly influenced by Federal Chair Powell's speech and key U.S. economic reports. For now, Ethereum faces a challenging period; without a decisive reclaim of the $4,500 level, the most likely path for ETH remains downward toward $4,000.
