Summary Ethereum trades near $4,040 after breaking below key support levels. RSI at 26.9 signals oversold conditions, but bearish momentum still dominates. Net outflows of $159.5M suggest accumulation, though near-term sentiment remains fragile. By Jainam Mehta Ethereum (ETH-USD) extended its decline on Thursday, trading near $4,040 after breaking through multiple support levels in a sharp sell-off. The downturn highlights how technical weakness, cautious sentiment, and risk-off flows across broader markets have combined to weigh on the world’s second-largest cryptocurrency. The 4-hour chart shows ETH falling out of its descending channel that has capped price since mid-September. The drop through $4,180 and $4,100 pushed price briefly to the $4,000 handle before a modest rebound. Immediate resistance now sits at $4,100–$4,180, where former support has flipped into resistance. Unless ETH reclaims this zone, momentum remains tilted bearish. ETH Price Dynamics (Source: TradingView) RSI at 26.9 indicates heavily oversold conditions, underscoring the intensity of recent selling. While this leaves scope for a short-term relief rally, upside may struggle to extend beyond the 20-EMA near $4,179 without stronger buying volume. On the downside, failure to hold $4,000 risks exposing the $3,900–$3,850 cluster, a critical support zone for traders. On-chain flows show heavy withdrawals Exchange data from September 25 recorded net outflows of $159.5 million in ETH, signaling strong withdrawals from exchanges. Sustained outflows often suggest investors are shifting tokens to long-term storage, reducing immediate selling pressure. However, the simultaneous price decline shows that confidence has not fully returned, with broader market caution limiting upside traction. This divergence—large withdrawals alongside falling price—points to accumulation by longer-term holders even as short-term sentiment remains defensive. Liquidity has thinned during the sell-off, leaving Ethereum vulnerable to further volatility in the near term. Macro pressures reinforce caution Ethereum’s decline comes against a backdrop of global macro uncertainty. Persistent questions around U.S. monetary policy, combined with rising risk aversion across equities and crypto, have weighed heavily on digital assets. The move is also consistent with a broad correction across major altcoins, underscoring that the pressure is market-wide rather than isolated to Ethereum. Despite near-term weakness, Ethereum’s longer-term narrative remains constructive. Scaling upgrades continue to improve network efficiency, while institutional interest through ETF-related developments highlights persistent demand. These factors suggest that while the immediate trend is under strain, structural drivers of growth remain in place. Outlook Ethereum’s near-term trajectory depends on its ability to defend the $4,000 level. A rebound supported by oversold RSI could stabilize price, but a decisive reclaim of $4,180 will be needed to re-establish momentum. Failure to hold above $4,000 risks triggering a deeper move toward $3,850. Previously, we discussed how Ethereum was approaching a fragile technical phase , with the $4,180 cluster serving as critical support. That outlook now shifts, as the level has flipped into resistance and the market is testing $4,000 for stability. Traders will be watching whether oversold conditions invite stronger bids or if bearish momentum extends into the upper $3,800s. This material may contain third-party opinions; none of the data and information on this webpage constitutes investment advice according to our Disclaimer . While we adhere to strict Editorial Integrity , this post may contain references to products from our partners. Original Post
