ETH Tests Critical Support as Bearish Momentum Shows Early Signs of Exhaustion

Ethereum (ETH) has been experiencing pressure due to selling because Ethereum could not hold above $3,000 after the extended corrective structure, according to the larger crypto market. Presently, there are indications from price action, derivatives positioning, and on-chain data that Ethereum is approaching a technical inflection point where the next move could occur.

Price Structure and Trend Analysis

Ethereum's price is currently $2,826, 3.49% lower daily, after a series of rejections between $3,000 and $3,175 confirming a lower high pattern in the short term.

When Ethereum broke below the $2,900 price point, market liquidity caused additional selling and pushed ETH under $2,900 as well as below the 100-hour simple moving average (SMA) reinforcing that bearish pressure is dominating the market.

Ethereum currently is sitting on the support zone of a symmetrical triangle after previously rejecting the 20-day Exponential Moving Average (EMA).

Ethereum has had approximately $163.96 million in total liquidations in the previous 24 hours, with $131.05 million attributed to long liquidations, according to Coinglass.

It should also be noted that the price of Ethereum is under the 23.6% Fibonacci retracement of the drop from $3,175 which means that bulls have not recaptured any of the bullish trend from the previous down trend. 

As per technical analysis, if Ethereum maintains the support of the symmetrical triangle it could possibly retest the 20-day EMA and if it breaks above this level Ethereum could retest the upper boundary of a symmetrical triangle near the 50-day EMA. 

On the downside, ETH could find support around $2,626 if it falls below the triangle's lower boundary. 

Also Read: Ethereum Whale Makes $600 Million Move: What it Means for ETH Investors

Momentum Indicators and Volatility

The Relative Strength Index (RSI) continues to trend lower below its neutral level. The shift indicates an increase in bearish momentum; the near-oversold condition allows for a reversal.

Hourly MACD continues to get wider in the negative zone, reflecting persistent bearish momentum.

The  Stochastic Oscillator is at the bottom, indicating that a technical bounce is more likely if sellers take a break.

Derivatives and On-Chain Context

The open interest for ETH on the CME has decreased significantly, from $5 billion in October to $2.36 billion, indicating that shorts are being covered rather than fresh bearish bets.

The net taker volume at Binance has also moved toward the neutral territory, implying that aggressive sellers are retreating.

The on-chain metrics are in line with stabilization, as Ethereum exchange reserves have reached their lowest point since 2016, while whale wallets holding 10,000 to 100,000 ETH have increased their holdings over the past few months.

Outlook

Ethereum remains technically bearish below $2,900. However, the dropping short interest, whale buying, and oversold momentum indicators are indicating that the downside momentum may be nearing exhaustion. 

A sustained defense of the $2,780-$2,800 zone is critical. A break above $2,980 would turn the market towards recovery, while a fall below $2,740 would invalidate stabilization and reveal a deeper downside risk.