ETH Tests Crucial Demand Area Amid Market Consolidation and Bitcoin Volatility
Ethereum (ETH) slipped below the $3,850 level on Monday, signaling growing caution among traders after a volatile weekend across major cryptocurrencies. Despite the decline, the asset continues to hover near a crucial ascending trendline that has supported its multi-month rally since early May.
Ethereum Price Analysis: Testing Key Support Levels
The daily chart shows Ethereum retesting the major support area between $3,700 and $3,850, which has acted as a strong demand zone since late August. This area coincides with the green support region highlighted on the chart, suggesting that bulls may attempt to defend the level to avoid a deeper pullback.
If the support fails to hold, analysts warn of potential downside toward the $3,400 level, where the next significant buy zone lies. On the upside, Ethereum faces immediate resistance around $4,100 to $4,250, where price rejections have repeatedly occurred over the past two weeks.
“This is a textbook retest of support after a sharp rally. If Ethereum can close above $3,900, it may re-establish bullish momentum into the $4,200 range,” said BITX technical market analyst. “However, losing the $3,700 level could open the door to a more extended correction.”
Market Context and Broader Trends
The correction comes as Bitcoin retraced below $108,000, influencing broader crypto sentiment. Meanwhile, renewed U.S.–China tariff tensions and uncertainty surrounding regulatory updates in the U.S. have added short-term pressure to risk assets.
Ethereum’s earlier surge above $4,000 had been fueled by rising institutional accumulation, expectations of Ethereum ETF filings, and optimism surrounding the network’s scalability upgrades. However, recent price action suggests traders are shifting focus toward profit-taking and range-bound consolidation after the strong Q3 performance.
As long as Ethereum holds above the $3,700–$3,800 zone, the broader uptrend remains technically intact. Analysts agree that a daily close back above $3,900 would signal renewed momentum, potentially targeting $4,250 in the near term.
“Ethereum’s structure remains healthy. This pullback could be a reset before the next leg higher, provided macro conditions stabilize,” noted BITX blockchain strategist.
For now, ETH below $3,850 represents a critical juncture—a test of whether buyers can sustain control or whether the market will seek lower liquidity levels before the next major move.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.