Ethereum Price Faces Steep Decline After Critical Fibonacci Rejection

Ethereum (ETH) is at a pivotal moment, having recently dropped below the $4,000 threshold. A significant rejection from the crucial 0.618 Fibonacci retracement level has fueled concerns among market analysts, pointing towards a potential further price crash for the leading altcoin.

Mounting Bearish Pressure

The current bearish sentiment initiated with a decisive rejection at the 0.618 Fibonacci retracement level, interrupting a recovery attempt that had pushed ETH up to $4,200. This failure led to the formation of a "lower high" on the 4-hour timeframe, a technical signal historically associated with escalating selling pressure. According to crypto analyst The Alchemist Trader, this rejection was exacerbated by increased bearish volume, indicating a surge in investors liquidating their holdings and firmly placing bears back in control of the market.

Critical Support Levels and a Glimmer of Hope

Ethereum is presently struggling to maintain a fragile hold around the $3,900 support level, suggesting a weakening of bullish momentum. Should this $3,900 support capitulate, analysts warn of a deeper decline, with the next major support zone anticipated below $3,400, specifically around $3,385. This level is poised to be the next critical line of defense for buyers. Despite the challenging outlook, a bullish reversal remains a possibility if buyers can decisively reclaim and hold the $3,900 support with renewed momentum. Such a move could invalidate the current bearish setup and potentially propel Ethereum back into an uptrend, surpassing the 0.618 Fibonacci retracement level.