Ether’s price has wobbled precariously around the psychological $3,000 mark for the past three weeks, showing evident signs of structural weakness following its recent flash crash. The expected ETH recovery faces significant obstacles due to a combination of lack of demand in futures markets and aggressive selling by experienced investors.
Market analyst Danny Naz warned that the asset is consolidating below a key resistance zone, forming negative technical patterns that could precipitate a larger decline if current supports fail.
Fundamental data reveals a complicated landscape for the second-largest cryptocurrency, as Ether futures are currently trading at a premium of just 3% relative to the spot market. In bearish conditions, premiums typically stay below 5%, signaling weak demand for leveraged long positions and reduced optimism among traders. This lack of bullish momentum suggests that the market is not ready for an immediate rally.
On the other hand, this negative trend in derivatives coincides with an alarming decrease in supply held by long-term holders, who have sold massively. According to records, this group has reduced their holdings by 847,222 coins over the past 30 days, marking the largest drop since January 2021. This constant selling pressure prevents the price from stabilizing above key levels.
Likewise, the asset’s inability to maintain its value is partly attributed to the drop in network fees, a direct indicator of demand for blockchain usage. Total chain fees amounted to only $15.1 million in the last month, representing a 45% decrease from the previous period, affecting the protocol’s economy. The reduction in on-chain activity reflects lower current interest from active users.
Will bulls be able to defend the critical support against massive selling pressure?
From a technical perspective, the ETH/USD pair has validated a bear flag on the daily chart after dropping below its lower boundary at $3,200. The recent rejection at the 50-day exponential moving average confirms that sellers maintain control, establishing a formidable resistance that halts any attempt at a sustained rebound towards higher prices. The market structure remains trapped between two trendlines that define the current consolidation.
Furthermore, if we analyze the 12-hour time frames, a break and close below the lower trendline of a megaphone pattern at $2,800 would be catastrophic. Such a move would open the way for a deeper correction towards the pattern’s measured target at $2,376, representing an additional 18% drop. Technical levels suggest that the risk of a significant capitulation remains very high.
Finally, for the ETH recovery to be viable, the price must overcome the $3,000 resistance and reclaim the moving average to invalidate the prevailing bearish thesis. However, if the $2,800 support gives way to the bears, we are likely to see the asset descend rapidly towards the demand zone between $2,716 and $2,623. The market remains on high alert awaiting a clear trend definition in the coming days.
