TL,DR
- Ether (ETH) fell to $3,800 this Tuesday, failing to consolidate its position above the $4,000 psychological level.
- Spot Ethereum ETFs have recorded net outflows of $640.5 million in the last eight days, eroding confidence.
- A technical “bear flag” pattern suggests that ETH’s price could seek a deeper correction down to $3,120.
Ethereum’s (ETH) recovery halted abruptly this Tuesday. The asset fell to $3,800 after failing to hold above the key psychological barrier of $4,000. This weakness coincides with a continuous wave of net redemptions from investors in spot Ethereum ETFs and a technical setup pointing to a deeper correction.
The recent 16% rally, which took ETH from a low of $3,500 on October 11, was neutralized by intense selling pressure around the key level. Trader “Philakone” noted on X (formerly Twitter) that there is “strong resistance at $4K.”
Recent history adds weight to this concern. The last time the ETH/USD pair was rejected from this zone, in December 2024, it preceded a drastic 66% drop. Analysts agree that bulls must decisively push and hold the price above this level to secure the recovery.
Analyst Daan Crypto Trades described the level as “pretty critical in the short/mid term,” explaining that a daily close above $4,000 would allow ETH to “get back into the previous price range and leave these lows behind.”
Lack of Demand and ETF Outflows
Ether’s inability to stay above $4,000 appears to be directly related to the absence of new buyers. The “Spot Volume Delta” metric, which measures the net difference between buying and selling volumes, remains negative. This indicates there is no real and sustained demand, weakening any breakout attempt.
Demand for spot Ethereum ETF products has also plummeted. According to data from SoSoValue, these investment products have registered net outflows on six of the last eight days. On Monday alone, Ether ETFs experienced an outflow of $145.7 million, bringing the total net outflows over the past eight days to $640.5 million.
From a technical perspective, ETH’s price action has formed a classic “bear flag” pattern on the 12-hour chart. The price broke below the flag’s lower boundary (at $4,000) this Tuesday, signaling the start of a potential significant drop.
The measured target for this bearish pattern is around $3,120, which would represent an additional 20% drop from current levels. The Relative Strength Index (RSI), still below the 50 mark, suggests that market conditions continue to favor the downside.
