Ethereum has rebounded from the $3.2K region after a deep liquidity sweep, signaling potential exhaustion of the recent downtrend. While short-term resistance remains strong, both technical and on-chain data suggest the market could be entering an accumulation phase led by larger participants.
Technical Analysis
The Daily Chart
On the daily timeframe, ETH has rebounded decisively from the $3K–$3.2K demand block, which coincides with the channel’s lower trendline and the 200-day MA. This confluence zone acted as a powerful reaction base, leading to the formation of a long lower wick, evidence of liquidity absorption by stronger hands.
The recent breakout attempt from the descending parallel channel is the first constructive signal since mid-October. ETH is now retesting the $3.6K–$3.7K resistance cluster, marked by the intersection of the channel’s midline and an institutional decision point.
If buyers manage to close above this range, it would confirm a structural shift, potentially opening the path for continuation toward $3.9K–$4.0K, followed by the higher liquidity zone near $4.4K. However, failure to sustain above $3.6K may trigger a short-term retest of the $3K region, which now acts as the primary support.
The 4-Hour Chart
Zooming in, the 4-hour chart reveals the bear trap setup in more detail. Following an aggressive breakdown beneath $3.3K, Ethereum briefly extended into the $3K liquidity pocket, sweeping the lows of the descending channel before immediately reversing. This sharp reclaim invalidated the bearish momentum and triggered a short-term reversal phase.
Currently, price is consolidating just beneath the $3.6K–$3.7K “Seller’s Base,” which represents the last unmitigated supply region created before the previous decline. A clean breakout and retest of this base would likely confirm that market control has shifted back to the buyers. Until that occurs, ETH is expected to fluctuate between $3.4K and $3.7K, building structure before the next expansion leg.
RSI momentum supports this scenario; it has broken out of a multi-week bearish divergence trendline and is now climbing steadily, suggesting room for further recovery if the structure holds.
Sentiment Analysis
The Spot Average Order Size metric for Ethereum reflects a notable behavioural shift following the recent market shakeout. During the drop toward $3.2K, whale-driven activity (green clusters) briefly spiked, a pattern that has historically preceded local bottoms and early accumulation phases.
This change implies that larger market participants are re-entering exposure at discounted prices, while retail traders remain cautious. Across previous cycles, similar transitions, from whale accumulation to retail capitulation, have marked the start of trend reversals or late-stage compression phases before major upswings.
If this behaviour persists and the $3-$3.4K region holds as structural support, Ethereum may be entering a low-volatility accumulation zone, setting up for a potential final bullish impulse toward the upper range of $4.5K–$4.8K.
