Ethereum has trended downward since its failed attempt to reclaim its all-time high on August 13. Profit-taking also picked up speed, providing sell-side impetus. ETH’s price has pulled back around 10% over the past five days, and it’s providing signals that bearish vigor is here to stay at least in the near term.
ETH long/short ratio dropped to a 30-day low of 0.90, showing traders’ growing caution. A ratio below one indicates more shorts than long ones open. The trend is representative of shifting sentiment within the market, where futures holders are increasingly expecting sustained downward pressure and near-term losses within the performance of Ethereum.
Moreover, Ethereum’s Moving Average Convergence Divergence (MACD) also noted a negative crossover today. The MACD line has now fallen below the signal line, and it suggests that sellers are driving the momentum. Traders interpret this as a bearish sign, which could push ETH further toward critical support levels near $4,000 in the coming sessions.
Ethereum price faces critical support zones
At press time, Ethereum trades at $4,224 as per TradingView data. If selling continues, the altcoin can retest its near-term support level of $4,063. A break below it can intensify the downward movement toward $3,491. Traders are closely watching these zones for signs of sustained selling or renewed demand entering the market.
Conversely, a fresh influx of buying could lift Ethereum toward $4,793. A breakout above it can open the way towards a reversal rally up to its record high at $4,869. Technicians are also guarded in their view, stating that near-term indications are contradictory and immediate support areas are the ones accountable for a reversal.
ETH is now just above the 20-day EMA at $4,134. A failure to hold this level would see Ethereum test its 50-day EMA at $3,651. A breakdown beyond this level would be seen as a more profound correction, wiping out gains seen over the recent upswing and boosting bearish sentiment in futures markets.
Momentum trackers also point to declining buying power. The Relative Strength Index (RSI) also pulled back to 58, previously overbought above 70. This indicates the market is shifting into neutrality. Recovering bullish support again requires regaining $4,500, and $4,750 to $4,800 is still the key resistance before new highs.
