Ethereum has entered a corrective phase after failing to break through the $3,300-$3,400 resistance zone, with the price now trading below $3,000 and on-chain data showing structural supply leaving exchanges.
At a Glance
- ETH rejected at mid-$3,000s, now testing $2,900 support
- Exchange supply ratio hits lowest level in years
- Daily RSI below 50 confirms momentum slowdown
- Why it matters: Short-term weakness clashes with long-term bullish supply dynamics
The second-largest cryptocurrency by market cap faces conflicting signals: immediate technical breakdown on shorter timeframes while longer-term exchange outflows suggest reduced sell-side pressure. This creates a market environment where further near-term declines could occur alongside an intact cyclical bull backdrop.
Daily Chart Breakdown
On the daily timeframe, ETH turned lower after rejection from the $3,300-$3,400 resistance block. This zone aligns with the downward-sloping 100-day moving average and remains below the slightly higher 200-day moving average.
Key levels to watch:
- Resistance: $3,300-$3,400 band (must reclaim for bullish trend)
- Support: $2,500-$2,600 demand cluster
- RSI: Rolled over from near overbought to below 50
The rejection keeps Ethereum capped within a broad range. The $2,500-$2,600 area represents the nearest significant demand zone, while the $3,300-$3,400 band acts as the primary supply region whose reclamation would be required to re-establish a strong bullish trend.
Daily RSI momentum confirms the slowdown, rolling over from near overbought territory and now sitting below 50. This technical development aligns with a corrective leg toward the aforementioned support cluster.
4-Hour Structure Collapse
The 4-hour chart reveals a clear breakdown from the ascending channel that carried prices from late-December lows toward the $3,400 area. This breakdown accelerated after losing both channel support and the intraday demand band around $3,000.
Current 4-hour conditions:
- Price: Accelerated lower toward $2,900
- RSI: Entered oversold territory
- Bias: Remains corrective below $3,000
The 4-hour RSI entering oversold territory indicates stretched intraday conditions, though not yet a confirmed reversal signal. As long as Ethereum trades below the former channel base and beneath the $3,000 region, the intraday bias stays corrective.
Risk remains for extension toward the higher-timeframe demand around $2,500-$2,600 unless a swift recovery above $3,100 invalidates the breakdown structure.
Exchange Supply Evaporates
On-chain metrics reveal a contrasting picture to the technical weakness. The exchange supply ratio for Ethereum has been trending steadily lower, now sitting at the lowest levels of the past few years.
Exchange supply insights:
- Ratio indicates diminishing share of circulating supply on centralized venues
- Reflects preference for long-term storage or staking over immediate liquidity
- Reduces structural sell-side inventory during corrections
This pattern typically signals that investors prefer holding for long-term storage or staking rather than keeping funds readily available for trading. The result reduces structural sell-side inventory even as prices undergo short-term corrections.
While lower exchange balances don’t prevent further near-term downside, such persistent outflows historically align with late-stage corrective phases within larger uptrends. This positioning means renewed demand could more easily translate into impulsive advances once macro conditions and technicals turn supportive again.
Market Implications
The combination creates a unique market structure where short-term technical weakness coexists with constructive longer-term positioning. Traders face a market that could see further declines toward $2,500-$2,600 while maintaining underlying bullish fundamentals.
Critical levels for trend determination:
- Bullish reclaim needed: Above $3,300-$3,400
- Bearish extension risk: Toward $2,500-$2,600
- Invalidation level: Recovery above $3,100 on 4-hour
The technical breakdown below $3,000 suggests more downside likely in the immediate term. However, the multi-year low in exchange supply indicates that any renewed buying interest could face limited sell-side resistance, potentially leading to sharp reversals when technical conditions stabilize.
Key Takeaways
- Ethereum’s rejection at $3,300-$3,400 resistance triggered a technical breakdown
- Daily and 4-hour timeframes confirm corrective momentum
- Exchange supply ratio at multi-year lows suggests reduced selling pressure
- Market structure allows for near-term weakness within longer-term bullish context
- $2,500-$2,600 represents the next major support zone to watch
