Ethereum’s Head & Shoulders Pattern Signals Imminent Crash - $4,000 Support About to Shatter

Ethereum's technical setup just flashed a massive warning signal that could send shockwaves through crypto portfolios.

The Breakdown Pattern

That classic head and shoulders formation isn't just textbook—it's screaming trouble. The pattern's neckline sits precariously above the $4,000 level, and momentum indicators suggest it won't hold much longer.

Target Locked

Traders who've seen this movie before know how it ends. The measured move projection points to significant downside once Ethereum breaches the critical support zone. Forget gradual declines—this could trigger algorithmic selling cascades that accelerate the plunge.

Market Psychology Shift

What started as healthy profit-taking now threatens to morph into full-blown capitulation. The same investors who cheered every rally suddenly remember that charts work both ways. Even the perpetual bulls are quietly adjusting their stop-losses.

Wall Street's favorite narrative—'digital gold'—meets technical reality. Sometimes patterns matter more than pitch decks.

What This Head And Shoulders Pattern Means For Ethereum Price

Crypto analyst Meliketrader shared a chart on the TradingView website showing the Head and Shoulders pattern that had been completed on the ethereum 4-hour chart. The chart shows the pattern had begun to appear back in August, with the left shoulder toward the middle of the month. The head would appear close to the end of August, and the right shoulder would complete the formation in mid-September.

Interestingly, following the completion of the Head and Shoulders pattern on the 4-hour chart, the Ethereum price had experienced a large bearish candle, which ended up taking out the neckline. Once this was done, it was a confirmation that the altcoin was at risk of more downside.

The neckline, which lies between $4,200 and $4,400, holds the key here, and since the Ethereum price is, once again, retesting this level, what happens here will determine where the price goes next. In the case of a rejection from here, then the Ethereum price will suffer further crashes.

Such a crash from the neckline WOULD send the price crashing back down below $4,000, since there isn’t much demand there. The analyst places targets around $3,850, calling out a range between $3,700-$3,900 during this time, which is all up to where the neckline is measured. “This level also lines up with the last major resistance zone, so it’s a natural magnet,” Melikatrader said.

Another development is that the RSI has shown divergence close to the head of the formation. The altcoin has also dropped into the oversold territory at this point, which is a pointer that momentum may be slowing down at this point.

Hope For The Bulls

In the event that the Ethereum price is to turn bullish from here, then there would need to be a successful breakout of the neckline at $4,320 and $4,400. If the altcoin is able to close back above this supply zone with conviction, then the analyst believes that this would invalidate the bearish Head and Shoulder thesis.

The Ethereum price would likely see a significant bounce if this happens, especially given that it is now in oversold territory. Nevertheless, the analyst advises investors to be cautious with sizing and manage risk during this time.