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Introduction
Ethereum has plunged to a four-month low of $3,160, wiping out its yearly gains and triggering significant liquidations. Despite the sell-off, analysts maintain that the asset’s core upward trend remains intact and could still reach $5,000 by year-end. The market faces short-term pressure but shows signs of controlled profit-taking rather than panic selling.
Key Points
- Ethereum's Taker Buy-Sell Ratio below 1.0 indicates seller dominance but reflects controlled profit-taking rather than panic, with strong buyer interest expected around $2,955-$3,000 support
- Technical analysts identify $3,500-$3,600 as the crucial resistance zone to reclaim for bullish momentum, while failure could push ETH toward $2,800 support
- Network fundamentals have weakened with daily active addresses down 24% since mid-August, and ETH has underperformed Bitcoin with a 28% monthly decline despite holding two-year trendline support
Technical Analysis Points to Controlled Selling, Not Panic
The world’s second-largest cryptocurrency by market cap experienced significant volatility this week, dropping to $3,160 before staging a modest rebound. According to CryptoQuant analyst PelinayPA, the Taker Buy-Sell Ratio on Binance has been hovering just below 1.0, confirming that the market is currently dominated by sellers. However, she emphasized that this dynamic “creates short-term downward pressure” without suggesting panic among investors.
PelinayPA described the current market activity as controlled profit-taking within an ongoing uptrend rather than a fundamental breakdown. She expects ETH to find strong buyer interest around the $2,955 to $3,000 zone before potentially resuming its climb toward $5,000 by year-end. “I believe the price will find buyers around this level,” the analyst wrote, adding that “the main trend remains upward, and I expect these buyers to potentially push the price toward $5,000 by the end of the year.”
Chart technician Ted Pillows identified $3,500–$3,600 as the critical resistance zone that Ethereum must reclaim for any bullish momentum to emerge. According to his analysis, failure to break above that range could push the asset back toward the $2,800 support area, creating additional downward pressure in the short term.
Network Fundamentals Weaken as ETH Underperforms Bitcoin
Beyond the price charts, Ethereum’s network fundamentals have shown concerning weakness. Daily active addresses have cratered by 24% since mid-August, indicating reduced user engagement with the blockchain. Historically, decreased network activity has correlated with price declines, as fewer transactions and diminished interest in decentralized applications (dApps) typically signal waning demand for the native token.
Market data from CoinGecko reveals that ETH is down 12.2% over the last seven days and has declined 28% across the month, significantly underperforming Bitcoin’s modest rebound during the same period. The ETH/BTC ratio currently stands at 0.03284 BTC, indicating a clear shift in capital allocation toward Bitcoin amid the current market uncertainty.
Despite these challenges, Ethereum continues to trade above its two-year trendline support, which it has maintained since 2022. Many market observers consider this technical structure to be the last major defense before a potential price bounce, making it a critical level to watch in the coming weeks.
Mixed Sentiment Amid Macro Pressures and Liquidity Shifts
Current market sentiment remains divided as traders navigate both technical and macroeconomic pressures. Liquidity clusters around $2,800–$3,000 are drawing attention as potential accumulation zones for institutional and retail buyers alike. Meanwhile, bulls are closely watching the $3,600 level as the key threshold that would confirm renewed strength in the Ethereum market.
The broader cryptocurrency market faces headwinds from U.S. Federal Reserve tightening policies and ongoing liquidity outflows, contributing to the cautious trading environment. These macro factors, combined with Ethereum’s specific technical challenges, have created a complex landscape for traders and investors.
Despite the current pressures, PelinayPA’s analysis suggests the broader trend remains constructive. If Ethereum can successfully defend its current support levels and regain key resistance zones, the path toward $5,000 by year-end may still be achievable, though it represents a steeper climb than many market participants initially anticipated.
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