Key takeaways:
Ethereum appears to have established a support level at $3,900, indicating a local bottom.
A unique Power of 3 pattern points to a possible 80% to 100% breakout in Q4.
Ether (ETH) may have indicated a local bottom at $3,900, with a significant technical pattern suggesting another major breakout could occur. The daily chart reveals that traders are paying close attention to the resurgence of the Power of 3 (PO3) model, also known as the Accumulation-Manipulation-Distribution setup, which previously escalated ETH from $2,000 to $4,900 between May and June.
The recent structure has mirrored this path. Ether buyers accumulated between $4,800 and $4,200 before a quick drop brought the price just below $4,000. Market analysis views this as a deliberate liquidity sweep or stop-hunt, clearing external liquidity near $4,180, a level noted in prior analyses.
This retracement, aligning with a daily fair value gap (FVG), has reinforced the bullish sentiment rather than diminishing it, potentially mirroring the Q2 setup.
Momentum indicators are also supporting this optimism. Both the 25-day and 50-day simple moving averages are currently acting as near-term resistance, with the next crucial move being a decisive daily close above $4,500. Achieving this level would give Ether a solid foundation for its next upward movement.
Looking ahead, analysts predict a possible 80–100% breakout as Q4 progresses, reminiscent of earlier year gains. With its recent dip below $3,900 appearing to act as a floor, Ether is poised to test new highs in the coming weeks.
Related: Ethereum’s ‘bull flag’ targets $10K as ETF demand returns
Ether derivatives and spot flows
Ether’s open interest (OI) and futures cumulative volume delta (CVD) have seen only modest increases while the price has risen about 15% in a week, suggesting that this advance is not yet driven by leverage and reducing the risk of forced-long liquidations if momentum stops, but also indicating potential for OI growth to support a secondary leg if spot demand remains strong.
On the contrary, a significant decline in spot CVD during the rally indicated net aggressive selling on the spot during strength, a classic bearish divergence that can show absorption by passive bids or distribution from larger holders, often leading to whipsaw volatility if support is challenged. If absorption persists and the price maintains levels between $4,200 and $4,400, sidelined leveraged traders could re-enter and extend the trend with controlled volatility.
Nonetheless, if bullish absorption weakens, the divergence raises the risk of pullbacks and sharp mean-reversion dips as liquidity pockets are swept away before the trend continues upward.
A near-term zone of interest is identified between $4,100 and $4,250, where internal liquidity is densely clustered and volume imbalances are noticeable. The price previously moved rapidly through this area without achieving a balanced interaction between buyers and sellers. Therefore, if bullish momentum fails to sustain a breakout above $4,500 in the upcoming days, this zone could serve as a vital retracement target or support area for price re-entry.
Related: Solana may have an edge over Ethereum in staking ETFs, says Bitwise CEO
This article does not contain investment advice or recommendations. Every investment and trading decision involves risk, and readers should do their own research before making a decision.
