ETH Price to $3,500 First? Why Are ETH Bears Getting Stronger?

Ethereum price is stuck in a sideways range, with multiple indicators suggesting a deeper correction in the short term.

Highlights:

• Ethereum bears are getting stronger as price continues to move sideways.
• Spot volume drops, signaling weak demand and ETH price vulnerability.
• If key support zones are lost, ETH price could drop to $3,500 before recovering.

Ethereum has been stuck in the $4,200-$4,500 range for the past two weeks amid weak spot and institutional demand, leading some traders to turn bearish, predicting that ETH could fall to $3,500 before any recovery.

Market sentiment turns negative

The volatile price of ETH, coupled with Bitcoin’s recent drop below $109,000, has caused market sentiment to shift as “sell” calls increase, according to data from Santiment.

“Traders have shifted their stance, becoming more bearish with expectations for Bitcoin to fall back below $100,000 and Ethereum below $3,500,” the market analysis firm said in a post on X on Tuesday.

An accompanying chart shows an increase in keywords like “selling” and “bearish” since late August, when Ether hit its all-time high of $4,950. However, Santiment notes that the market often goes against crowd expectations, and this could actually be “the ideal signal to buy.”

Ethereum traders falter

Spot demand for ETH has continued to be sluggish over the past two weeks, with ETH volume plummeting from $18.5 billion on August 22 to $2.6 billion on September 8, an 85% drop, according to data from Glassnode. The drop in spot volume reflects waning investor participation, suggesting that traders’ confidence in the market is also waning.

While the spot Cumulative Volume Delta (CVD), the net spread between ETH buy and sell volumes, has improved slightly as selling pressure has cooled, it is still well below levels seen in late August. Low spot volumes and negative CVD indicate weak demand for ETH , raising the risk of price weakness. However, bulls could regain the balance if CVD stabilizes. Institutional investors are also on the retreat, with Ethereum spot ETFs recording over $1.04 billion in net Capital over six consecutive trading sessions, adding to the selling pressure.

How low can ETH go?

According to the data, ETH price is currently retesting the lower trendline of the symmetrical triangle pattern at $4,280 on the daily time frame. If the daily candle closes below the triangle pattern, selling pressure could continue to increase, pushing the price down to the $3,600 region, equivalent to a drop of about 16% from the current level.

MN Capital founder Michael van de Poppe believes ETH could fall to the $3,500–$3,800 demand zone before a recovery occurs. “One more dip for $ETH, hit the green zone and then only go up from there. That would be my ideal scenario.”

Analyst Ted Pillows also spotted large liquidation clusters in the $3,600-$4,000 range, and suggested that Ethereum could dip first to collect liquidation, before reversing. “It looks like a liquidation sweep below could happen before the market reverses.”

The analysis, data and information in the article are for informational and reference purposes only and should not be XEM investment advice. The cryptocurrency market always has high volatility and high risks, investors need to consider carefully before making a decision.