Ethereum Price Analysis: ETH Could Drop Below $3K Without Key Recovery

Ethereum is recovering slightly after a massive drop that took the price below $4,000. The broader market remains cautious as traders reassess their positions following recent volatility, which could lead to a reversal of the bullish ￰0￱ Analysis By Shayan The Daily Chart On the daily timeframe, ETH recently broke below the midline of its ascending channel, the 100-day moving average, and touched the 0.5 Fibonacci retracement level near $3,400-$3,500. This zone coincides with the previous structure support, triggering a bounce toward $3,800. However, the RSI is still below 40, showing weak momentum.

A daily close back above $4,000 could mark a short-term recovery, but failure to reclaim the channel would likely send ETH below the $3,000 range, which would mean the end of the bull ￰1￱ 4-Hour Chart The 4-hour chart reveals that Ethereum found temporary support within the $3,400 demand zone after a sharp ￰2￱ RSI also dipped into the oversold area, and is now near 24, suggesting a potential short-term reversal. Still, resistance at $3,800 remains critical. A rejection there could lead to another retest of $3,400, while a clean breakout may open the path toward $4,200 ￰3￱ Analysis Funding Rates Funding rates across exchanges have plunged into negative territory, the lowest since late 2024, as traders rushed to unwind long ￰4￱ reset indicates fear and liquidation pressure, but could also hint at a potential bottom if the bearish sentiment continues while the price stabilizes.

Historically, negative funding rates during deep pullbacks have preceded short-term recoveries once selling momentum fades. Therefore, while the market could be in the early stages of a bearish reversal, there is still hope that this move could just be a flush out to cool off the futures market and pave the way for a spot-driven, sustainable rally.