Ethereum Struggles at $4,000 as ETF Outflows Raise Risk of Further Downside

Ethereum’s latest rally has once again lost momentum, with the cryptocurrency struggling to stay above the $4,000 mark. With weak demand and declining spot ETF inflows weighing on sentiment, analysts warn that Ether (ETH) could face a deeper correction toward $3,100 if buyers fail to regain control.

Ethereum Technicals Flash Warning as $4,000 Zone Triggers Renewed Sell-Offs

Ether slipped to around $3,800 on Tuesday, marking another failed attempt to hold above $4,000. The pullback follows continued net redemptions from spot Ethereum ETFs and a weakening technical setup signaling a potential move lower.

Ether climbed 16% from its recent low of $3,500, but selling pressure quickly built near the $4,000 psychological level. Market watchers observed that this area has consistently acted as a strong resistance point.

Trader Philakone noted that Ethereum continues to face strong resistance near the $4,000 mark—a level that previously triggered a major sell-off in December 2024, resulting in a 66% decline.

Ethereum Bulls Face Critical $4,000 Test as Analysts Eye Breakout Zone

Crypto commentator Daan Crypto Trades emphasized that bulls must push and hold the price above $4,000 to confirm a recovery. He explained that repeated failures to break higher could signal further weakness in the short to mid term.

Other market analysts also weighed in on the topic:

• Daan Crypto Trades noted that a daily close above $4,000 could help Ethereum re-enter its previous trading range and move away from recent lows.
• He pointed out that the key resistance zone around $4,000–$4,100 will likely see a strong battle between buyers and sellers.
• Jas Crypto added that this level will determine whether the current pullback develops into a deeper correction or serves as a brief pause before the next upward move.
• According to him, the asset could potentially reach $5,000 if the bulls successfully defend the $4,000 price level.

Analysts agree that a sustained breakout above the $4,000–$4,300 zone would be the first sign of a new bullish phase.

Buyer Fatigue Limits Upside Momentum

Despite several rebound attempts, Ether’s price remains capped below $4,000 as buying interest continues to fade. Data from spot exchanges show weak participation from new buyers—signaling that the recent recovery lacks conviction.

The spot volume delta, a metric measuring the balance between buying and selling volumes, remains negative across major exchanges. This indicates that selling activity still outweighs buying pressure, reducing the likelihood of a strong breakout in the near term.

ETF activity further reinforces this trend. Data from SoSoValue showed that spot Ethereum ETFs have recorded outflows in six of the past eight trading days. 

On Monday alone, Ether investment vehicles experienced $145.7 million in investor redemptions, bringing total outflows for the past week to $640.5 million. For sentiment to improve, ETF inflows and broader market demand must return. Without fresh buying momentum, analysts warn that any move above $4,000 could be short-lived.

Bear Flag Breakdown Points to $3,100 Target

From a technical perspective, Ether’s price action has formed a bearish continuation pattern known as a “bear flag” on the 12-hour chart. The pattern confirmed when ETH fell below the flag’s lower boundary at $4,000 on Tuesday, signaling a potential move lower.

Here are other key technicals and trends to note:

• The bear flag pattern points to a potential downside target near $3,120, indicating a possible 20% drop from current prices.
• The Relative Strength Index (RSI) remains below the neutral 50 level, showing that market momentum still favors sellers.
• Some traders maintain a positive outlook, viewing the recent decline as a healthy correction within Ethereum’s broader uptrend.
• Analyst Jelle suggested that ETH may be retesting the key breakout level around $4,000 before attempting to resume its upward momentum.

While short-term signals suggest further weakness, many investors are watching closely to see whether bulls can reclaim $4,000. A decisive recovery above this level could shift market sentiment and reignite the push toward $5,000. Until then, Ethereum remains in a delicate position, balancing between a possible rebound and the risk of another leg down toward $3,100.