Ethereum Plummets 6% as Bulls Lose Their Grip on $4,500 Resistance - Is $4,000 Next?
Ethereum bulls just got handed a brutal reality check as the digital asset tumbles 6% amid failed resistance battles.
The $4,500 Barrier That Broke the Bulls
Market momentum shattered against Ethereum's critical $4,500 resistance level—traders watched in real-time as buying pressure evaporated faster than a meme coin's utility. The failure to hold ground signals deeper structural weakness in the current rally.
Technical Breakdown Signals Deeper Trouble
Chart patterns now point toward $4,000 as the next logical support zone. Volume indicators show institutional players stepping back while retail traders panic-sell into the dip—classic market behavior that typically precedes further declines.
Meanwhile, traditional finance analysts nod sagely about 'healthy corrections' while quietly adjusting their short positions. Because nothing says 'healthy' like watching six percentage points vanish into thin air overnight.
The real question isn't whether Ethereum finds support at $4,000—it's whether this slide represents a temporary setback or the beginning of a broader market recalibration. Either way, buckle up.
Fed Rate Cut Bounce Fizzles
Ethereum (ETH) initially spiked above $4,600 after the U.S. Federal Reserve announced a 25 basis-point rate cut and hinted at a softer policy path for 2025. But the rally quickly lost momentum, with selling pressure intensifying as unrealized profits among large holders reached levels last seen in 2021.
On-chain flows indicate that more ETH is moving from staking contracts to centralized exchanges, signaling caution among whales. Likewise, low network fees show subdued on-chain demand, reinforcing bearish short-term sentiment.
Technical Outlook: $4,000 Ethereum (ETH) Test in Play
From a technical perspective, Ethereum’s price action has turned negative after breaking below its 50-SMA ($4,502) and 200-SMA ($4,396) on the two-hour chart. Analysts note that the breakdown candle resembled a Marubozu pattern, a strong bearish signal that often precedes further downside.
The Relative Strength Index (RSI) has plunged to oversold levels NEAR 18, suggesting conditions are stretched but not yet bullish. Immediate downside targets lie at $4,242, $4,159, and potentially $4,065 if selling pressure persists.
A routine retest of the $4,395–$4,502 band is expected; failure to reclaim this level could pave the way for a drop toward $4,000 support.
For bulls, only a decisive reclaim above $4,502 WOULD shift momentum back toward $4,588 and $4,699. Until then, traders are advised to treat rallies as shorting opportunities rather than signs of recovery.
Short-Term Pain, Long-Term Conviction
Despite short-term weakness, institutional accumulation still supports Ethereum’s long-term growth. BitMine’s latest acquisition shows that deep-pocketed investors continue to bet on ETH’s rise, even as short-term volatility unsettles retail traders.
The wider market remains delicate, with Bitcoin hovering around $114,000 and major altcoins like XRP, Solana, and Dogecoin also declining. Analysts believe that the upcoming week, marked by Fed Chair Powell’s speech and key U.S. economic reports, could influence Ethereum’s next significant move.
For now, ETH bulls face a tough challenge: unless $4,500 is regained decisively, the most likely direction remains toward $4,000.
Cover image from ChatGPT, ETHUSD chart from Tradingview
