Ethereum starts the week trading around $4,000 after facing rejection near the top of its descending channel. Despite recent relief from buyers, the broader structure remains corrective.

Technical Analysis

By Shayan

The Daily Chart

On the daily timeframe, ETH ($3,937.04) is hovering just below the 100-day moving average, which is acting as short-term resistance. The RSI sits near the midline at 47, indicating a lack of directional bias for now.

A break and close above $4,200 would open the door for a retest of the $4,600 supply zone, but failure to break above the upper trendline could signal further weakness. On the downside, the $3,500 region remains the critical support to hold. A close below it could extend the retracement toward $3,000 and below the key 200-day moving average, which could be disastrous for ETH.

Source: TradingView

The 4-Hour Chart

The 4H chart shows a rejection from the $4,200 resistance, which aligns with a previous key supply area. The current retracement found temporary demand in the fair value gap zone around $4,000. However, the RSI has already turned down from overbought conditions, and short-term bullish momentum has cooled off.

If buyers want to maintain control, they must defend the FVG and reclaim the recent high. Otherwise, another sweep toward the lower channel boundary around $3,600 and even lower becomes more likely in the coming sessions.

Source: TradingView

On-Chain Analysis

Exchange Reserve

On-chain sentiment remains supportive. Ethereum’s exchange reserves have continued their steady decline, now reaching 15.8 million ETH, the lowest in years. This signals reduced selling pressure from spot holders, a long-term bullish factor.

However, with futures markets, metrics are neutral, showing no excessive leverage on either side. While this clears the path for a balanced and spot-driven market, it also means a breakout needs fresh catalysts to ignite. These catalysts usually come from the futures market. Until then, ETH remains in a consolidation phase within a larger corrective structure.

Source: CryptoQuant

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