The second-largest cryptocurrency by market capitalization has experienced heightened volatility recently, trading near key support after a 4% intraday drop. Despite short-term sell pressure, Ethereum’s fundamentals, including upcoming gas limit expansions and continued institutional interest, may help stabilize the ETH ($2,824.50) price over the coming weeks.

Market Pressure Builds as Ethereum Tests Support

This week, Ethereum’s price today slipped below key moving averages, hovering near the $2,900 mark. On-chain metrics indicate declining activity, with the number of weekly active addresses dropping to mid-year lows. This drop in engagement, coupled with institutional outflows, has contributed to downward momentum.

Ethereum (ETH) demonstrates structural resilience with higher lows and bullish chart patterns, as analysts cite 2025 network upgrades and institutional interest amid recent price dips and market volatility. Source: James via X

Crypto commentator James Easton, citing the weekly ETH/USD chart, emphasized higher lows as a potential bullish signal: “$ETH is beautiful. I don’t understand how anyone can be bearish,” he noted on social platform X. While this reflects market sentiment rather than institutional analysis, it highlights how traders interpret technical patterns in real time.

Historical Context: Similar ascending channels in Ethereum have historically provided support during midterm corrections. Traders typically watch for higher lows and volume patterns to confirm potential rebounds, though these signals are less reliable during periods of low network participation.

Ethereum Network Expansion Strengthens Medium-Term Outlook

A key driver for the Ethereum price outlook is the planned gas limit increase from 60 million to 80 million units after the January 7 hard fork. This upgrade aims to enhance network throughput and reduce transaction fees.

According to Christine Kim, VP of research at Galaxy Digital, developers are prepared to implement the change pending confirmation from the All Core Developers meeting. Barnabas Busa of the Ethereum Foundation noted that execution layer and consensus optimizations remain prerequisites.

Historically, Ethereum’s gas limit expansions have tended to stabilize prices in the medium term, but they rarely trigger immediate breakouts. This is because network upgrades must align with active market participation and macroeconomic liquidity conditions to have a meaningful impact on price.

ETF Outflows and Whale Selling Weigh on Sentiment

Not all indicators point to a bullish recovery. On-chain data shows that whale wallets have recently sold over 28,500 ETH, while last week’s 12% correction triggered liquidations exceeding $200 million.

BlackRock led a significant Ethereum ETF outflow yesterday, selling $221.3 million of ETH, contributing to a total $224.2 million decline across $ETH ETFs. Source: Ted via X

ETF activity also reflects caution. U.S. spot Ethereum products, including BlackRock’s ETHA fund, recorded over $224 million in outflows. Total ETF net assets fell by nearly $3 billion since mid-December, indicating a methodical reduction of institutional exposure.

Expert Interpretation: These outflows do not signal systemic weakness but suggest heightened short-term risk. Traders should monitor whether selling pressure stabilizes near $2,900 before considering bullish positions.

Technical View: Support and Resistance Zones to Watch

Ethereum’s short-term technical patterns indicate compression below the $3,000 zone. Bears have pushed ETH beneath the ascending trendline, while trading volumes remain subdued. Key support levels include $2,900, $2,716, and $2,623, with potential short-term downside targets around $2,554.

Ethereum faces weakening support around $2,900, with potential short-term pullbacks to $3,000–$3,020 or further declines toward $2,720 if selling pressure intensifies. Source: AndeWave on TradingView

Conversely, a successful reclaim of $3,350 resistance could signal a medium-term trend reversal, opening the path toward $3,659 and higher. Traders historically treat this level as critical, particularly when coupled with improving on-chain engagement and institutional inflows.

Risk Framing: Short-term signals such as inverse head-and-shoulders patterns can indicate reversals, but their reliability diminishes in declining markets. Investors should treat these patterns as one piece of a broader analytical framework.

Final Thoughts

Ethereum enters the week at a critical junction. Bulls are defending the $3,000 zone, supported by higher lows, upcoming gas limit upgrades, and chart-based medium-term signals. Bears remain active, citing reduced engagement, ETF outflows, and pressure below major moving averages.

Ethereum was trading at around 2,828.97, down 3.97% in the last 24 hours at press time. Source: Ethereum price via Brave New Coin

Near-term momentum will likely be determined by the $2,900–$3,120 range. A decisive breakout in either direction could shape the next phase of the market cycle, influencing both short-term traders and long-term holders. By combining technical patterns, network developments, and institutional flows, investors can make informed decisions grounded in experience, expertise, and observed historical trends.