Ethereum continues to bleed slowly below the $3,100 level as overall crypto sentiment remains weak. After breaking down from a local distribution range, ETH has been sliding, with lower highs and lows forming consistently. Despite short-term oversold signals, buyers are still hesitant, and open interest shows a cooling derivatives market with little fresh leverage entering.
Technical Analysis
By Shayan
The Daily Chart
On the daily timeframe, ETH is trading just above the $3,000 support zone after breaking down from the key $3,500 supply zone. The price is still well below both the 100-day and 200-day moving averages, which confirms the bearish bias for now.
Momentum has slowed, and RSI sits at 32, hovering around oversold territory. If buyers fail to hold this current support, the next major level sits around $2,600, followed by the $2,100 major low. On the flip side, reclaiming the $3,500 level would be the first sign of strength, but that would need significant volume to back it.
The 4-Hour Chart
On the 4-hour chart, ETH remains inside a falling wedge pattern, a structure that typically signals a potential reversal, but so far, there’s no confirmed breakout. The asset is testing the lower trendline of this wedge and trying to hold above the $3,000 zone.
RSI shows a slight bullish divergence, which may result in a short-term relief bounce. But unless a clean breakout above the $3,200 highs occurs with volume, any move could be a fakeout. Overall, the lower highs and lower lows suggest bearish control remains unless proven otherwise.
On-Chain Analysis
Open Interest
Open interest has dropped significantly since early November, showing a reduction in leverage across Ethereum markets. From over $30B, it has now come down closer to $18B, aligning with the recent price drop.
This drop indicates traders are de-risking, closing positions, or getting liquidated. That often comes before a volatility spike, which could either be a recovery bounce or a continuation sell-off. Until the open interest experiences a sustained rise with positive price action, momentum is likely to stay muted.
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