Ethereum (ETH) is currently at a pivotal point, testing a critical support zone between $3,200 and $3,125. This area is being closely watched by traders and analysts for signs of a potential bullish wave-5 continuation, according to an Elliott Wave analysis by crypto market researcher More Crypto Online. The cryptocurrency is trading around $3,150, while Bitcoin holds steady above $95,000, the broader altcoin market, including ETH, is showing signs of consolidation after a recent rally.
$ETH
— More Crypto Online (@Morecryptoonl) December 5, 2025
Ethereum is currently testing a critical support area between 3,200 USD and 3,125 USD. The chart produced a clean, 5-wave looking C-wave advance from Monday’s low, and while the 100 % extension target has now been reached (an ideal level for circle wave C of the larger wave… pic.twitter.com/Alyq7giEJU
Three-Wave Pullback Suggests Pause, Not Trend Reversal
The analysis points to a textbook five-wave C-wave advance from Monday's low, which reached the 100% Fibonacci extension target. This level is considered an ideal reversal point for the larger wave 4 structure within Elliott Wave theory. The pattern suggests that the corrective phase might be nearing its end, potentially paving the way for another upward movement. This bullish outlook remains valid as long as ETH can maintain support above the $3,000 level. The recent pullback from the peak near $3,380 has unfolded in a three-wave pattern, which often indicates a temporary pause rather than a definitive trend reversal.
Downside Risks if $3,125 Breaks: Wider Wave-4 Correction Possible
Despite the potential for a bullish continuation, there are downside risks if Ethereum breaks below the $3,125 support level. The preceding upmove from December's low also exhibited a three-wave pattern, leading to cautious optimism among analysts. Without a clear five-wave confirmation of a downward trend, the bullish case for wave 5 remains strong. However, a breach of Thursday's low around $3,125 could invalidate the short-term bullish setup. This would likely extend the wave 4 correction, potentially pushing prices down towards $2,900 or even lower. On-chain metrics, such as increased exchange inflows and profit-taking by long-term holders, as reported by Glassnode, support this cautious view. Nevertheless, the fundamental picture remains strong for an upside move, with Ethereum's Dencun upgrade improving layer-2 scalability. Transaction fees have decreased by 40% in the past month, attracting more decentralized finance (DeFi) and non-fungible token (NFT) activity.
Market Sentiment, Volatility, and Key Trading Levels to Watch
The market sentiment for Ethereum is characterized by a duality of optimism and caution. Spot ETH ETFs are managing over $15 billion in assets and have seen net inflows of $500 million this week, according to Bloomberg Intelligence. The Crypto Fear & Greed Index stands at 68, indicating a state of "greed," but this is tempered by underlying caution. Options traders are anticipating moderate volatility, with implied volatility around 55% for the December expiry. For swing traders, the $3,200–$3,125 zone presents a high-conviction entry point for long positions, with stop-loss orders placed below $3,000. Scalpers may look for quick reversals indicated by hourly RSI divergence. As the effects of Ethereum's Shanghai upgrade continue to mature and institutional adoption accelerates, this test of support could signal a prelude to a December breakout. Investors are advised to monitor volume spikes and closely watch the $3,000 floor. A sustained hold above this level could propel ETH towards $3,800 by the end of the year, aligning with wave 5 projections.