Ethereum price retreated on Tuesday, trimming gains after failing to hold above the $3,650 mark. Despite the short-term correction, traders believe ETH could find stability near the $3,360 support zone, setting the stage for another potential recovery.
Ethereum Pulls Back After Failing to Hold $3,650
After a promising start to the week, Ethereum (ETH) lost momentum as selling pressure increased near the $3,650 resistance level. The token initially followed Bitcoin’s upward trend, pushing through $3,550 and $3,600 before forming a local high at $3,658.
However, the move was short-lived. Bears stepped in aggressively, forcing the price below the $3,550 level. Technical data from Kraken confirms that ETH also broke beneath a short-term bullish trend line at $3,575, signaling a potential shift in short-term sentiment.
By mid-session, Ethereum had declined to around $3,400, approaching the 50% Fibonacci retracement level of the prior rally from $3,178 to $3,658. The pullback coincided with reduced trading volume and a flattening 100-hourly Simple Moving Average (SMA), suggesting market indecision following the earlier rally.
Technical Picture: Bulls Hold Their Ground at $3,360
Despite the downside pressure, Ethereum continues to find buyers around the $3,360–$3,400 range. This zone aligns closely with the 61.8% Fib retracement level, making it a technically strong area of support.
If bulls manage to defend this region, a short-term rebound could emerge. The first test would be regaining $3,500, followed by a move toward $3,550, which now serves as both resistance and a key pivot level.
A decisive daily close above $3,550 would likely confirm a recovery structure, potentially targeting $3,650 initially and $3,800 in an extended rally. Analysts note that this setup would require improved volume and stronger conviction from buyers to offset recent weakness.
The Relative Strength Index (RSI) has dropped from overbought levels near 70 to the neutral zone, suggesting that Ethereum’s pullback may be a healthy correction within a larger uptrend rather than a trend reversal.
Downside Risks Remain if Support Fails
If Ethereum fails to hold above $3,360, the market could face a deeper decline. The next key supports are seen near $3,290 and $3,220, both of which align with prior consolidation zones from early November.
A breakdown below $3,220 would open the door to further losses, with $3,175–$3,150 acting as the final defense before Ethereum risks revisiting its early-month lows. Traders warn that failure to maintain current levels could invite additional selling from short-term holders taking profits near resistance.
“ETH’s mid-range weakness is mostly a function of reduced momentum,” said a market analyst. “As long as it remains above $3,360, the structure is still intact. But a breakdown below $3,300 could shift sentiment quickly toward caution.”
Market Context and Sentiment
Ethereum’s performance mirrors the broader crypto market’s recent consolidation phase. Bitcoin has struggled to regain footing above $100,000, creating spillover effects across altcoins. However, analysts remain confident in Ethereum’s mid-term trajectory due to growing institutional activity and renewed focus on layer-2 scaling solutions.
On-chain data continues to show long-term holders accumulating ETH, even as short-term traders take profits. Exchange balances have declined modestly over the past week, signaling reduced selling pressure.
Additionally, upcoming network developments — including rollup improvements and staking efficiency upgrades — are expected to enhance Ethereum’s appeal to developers and enterprise users, reinforcing its value foundation over the long term.
Outlook: Cautious Optimism Above $3,360
In the near term, Ethereum is likely to remain range-bound as traders watch for confirmation of a bullish rebound. A close above $3,550 would strengthen confidence in another rally toward $3,650, with potential extensions to $3,800–$3,880 if broader market sentiment improves.
Conversely, sustained weakness below $3,360 could trigger a retest of $3,290, where the next accumulation phase may begin.
Overall, the Ethereum price remains within a constructive structure despite recent volatility. As long as bulls continue defending the $3,360 support zone, ETH’s broader uptrend remains technically valid, keeping the path open for another leg higher in the days ahead.
Post Views: 1