Ether Crashes to $4K, Analysts Predict $3,500 Bottom

The current sell-off has pushed Ether to critical technical levels, with the asset trading marginally above $4,000 after shedding 3.3% in a single day. Analyst ‘Sykodelic’ identified growing oversold signals, predicting a $3,900 bottom within days based on a setup reminiscent of June’s price action. “The bottom is in for Bitcoin. And it’s almost in for $ETH,” Sykodelic noted, highlighting the Relative Strength Index (RSI) approaching oversold territory alongside lower lows into supply zones.

Macro trader Jason Pizzino contextualized the move, stating that Ether’s abnormal price surges “always lead to corrections of at least 20%, generally more like 30%-40%.” This perspective aligns with analyst Ted Pillows’ observation that Ethereum “seems like it wants to go lower,” with the next significant support level around $3,800 representing a potential accumulation zone. Multiple analysts have converged on the $3,500 level as a plausible correction target, which would represent a 30% decline from peak prices—a typical retracement following major rallies.

Beneath the surface of the price decline, on-chain data reveals a stark divergence between retail and institutional behavior. While retail investors appear to be panic selling, whale entities are aggressively accumulating. According to ‘Ash Crypto’, ten whales purchased over 210,000 ETH worth approximately $860 million over-the-counter during the downturn. “While you are panic selling, whales are buying your cheap Ethereum,” Ash Crypto remarked, highlighting the strategic positioning of large holders.

Supporting this contrarian signal, data from Glassnode and CryptoQuant shows Ethereum balances on centralized exchanges plummeting to their lowest levels since 2016. Nick Ruck, director at LVRG Research, interpreted this divergence: “Although this seems contradictory, as low exchange balances reflect decreased short-term selling, this divergence hints at a contrarian accumulation signal while macro headwinds could soon ease into a rebound for Ethereum.” The combination of whale accumulation and reduced exchange supply suggests long-term confidence despite short-term price weakness.

The selling pressure extends well beyond Ethereum, creating what analysts term an “altcoin bloodbath” across the cryptocurrency market. Avalanche (AVAX) exemplifies this trend, dumping 7.7% to $31.38 after nearly doubling in price over the previous three months. Similarly, Pump.fun (PUMP), Mantle (MNT), Cronos (CRO), and Sky (SKY) all registered significant losses over the past 24 hours, mirroring Ethereum’s downward trajectory.

Amid the widespread decline, only two top-100 altcoins managed to stay in the green: Flare (FLR) and Immutable (IMX). Their relative outperformance suggests selective accumulation or project-specific developments providing insulation from the broader market downturn. The uniform weakness across most altcoins indicates correlated selling pressure rather than isolated project failures, with Ethereum’s correction setting the tone for the entire altcoin complex.

The current correction follows Ethereum’s spectacular 225% rally from April to August, which created overextended conditions that typically necessitate a healthy pullback. The broader crypto market context remains challenging, with total market capitalization retreating below the $4 trillion threshold. However, the simultaneous whale accumulation and declining exchange balances provide a nuanced picture that contrasts with surface-level price action.

Looking forward, analysts will monitor whether the $3,800-$3,900 support zone holds as predicted. A breach below these levels could open the path toward the widely discussed $3,500 target. The resolution of this correction will likely depend on broader macroeconomic conditions and whether the current whale accumulation represents smart money positioning for a rebound or merely temporary bottom-fishing. For now, the market watches for either stabilization at current levels or further downside toward historical correction targets.