Ethereum bear case strengthens | Credit: Hameem Sarwar
Share
Key Takeaways
ETH has broken below the key $4,000 support and invalidated a bullish flag setup.
The Long/Short Difference suggests elevated sell pressure that could deepen losses.
The Supertrend and a breakdown of the head and shoulders confirm the bearish bias.
Ethereum (ETH) price is under heavy pressure after breaking below the $4,000 support level for the first time since August.
Over the past seven days, the cryptocurrency has shed 13.86%, fueling concerns that the market’s second-largest asset may be sliding toward a prolonged bearish cycle.
Ethereum Collapse Sparks Fear
On the daily chart, ETH’s price had previously formed a bull flag, a setup that usually signals continuation and an upside rally toward $5,000.
But that scenario failed to play out. Instead, ETH collapsed below the flag’s lower trendline, turning a once-bullish structure into a bearish setup.
Get These Top Crypto Casino Offers Now!
Sponsored
Disclosure
We sometimes use affiliate links in our content, when clicking on those we might receive a commission at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
Zooming in, the Money Flow Index (MFI) has dropped to 25.06, showing that selling pressure has intensified while ETH slips deeper into oversold territory.
For momentum to shift, demand would need to return strongly. If that happens, it could drive Ethereum’s price back toward the upper trendline near $4,752.
However, the Supertrend indicator has flipped red, reinforcing the bearish outlook. As a result, a breakdown appears more likely in the short term than a rapid rebound.
Amid the decline, online chatter has intensified, with some suggesting that ETH could be sliding into the early stages of a bear market. These concerns aren’t without merit.
What’s Happening On-Chain
After all, the 2022 bear market began similarly, with a steady loss of key supports that resulted in prolonged downside. CCN evaluated whether those fears were valid by using the Market Value to Realized Value (MVRV) Long/Short Difference.
This indicator compares short-term holders’ average unrealized profit or loss against long-term holders.
When the reading is positive, short-term traders earn higher relative profits than long-term holders. In most cases, this leads to increased selling pressure.
However, negative values suggest that short-term traders are capitulating, while long-term holders remain relatively stable.
For Ethereum, movements in the MVRV Long/Short Difference have historically served as early signals for cycle shifts into bear markets and recoveries.
ETH MVRV Long/Short Difference | Credit: TradingView
The metric is 28.14% at press time, indicating that short-term holders have more unrealized profits. Should this reading rise, Ethereum’s price risk declines further, making the bear market concerns valid.
ETH Price Analysis: Bear Trap or Not?
On the 4-hour chart, Ethereum’s technical structure paints a similar bearish picture. This time, ETH has broken below the neckline of a head-and-shoulders pattern, a reversal setup that signals the start of a deeper downtrend.
Losing this neckline confirms seller dominance and suggests Ethereum’s price may face further downside pressure.
If this trend continues, ETH risks dropping to $3,731 near the 0.236 Fibonacci retracement level. Failure to defend this region might make the correction worse, as it could hit $3,353.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
