Key takeaways:
Declining spot purchases and increasing Ethereum ETF outflows indicate diminished demand, posing a risk of further declines for Ether.
Ether’s bear flag suggests a potential 20% decrease to $3,100.
Ether (ETH) dropped to $3,800 on Tuesday, unable to maintain the $4,000 mark as spot Ethereum ETF investors continued withdrawing funds. This was accompanied by technical indicators signaling a more profound correction for ETH’s price.
Ether price meets “strong resistance” at $4,000
Ether’s 16% bounce from a $3,500 low on October 11 was interrupted by selling near the $4,000 psychological threshold.
This indicates that “there is a strong resistance at $4K,” stated trader Philakone in a post on X on Monday.
Related: BitMine’s Lee believes Ether’s ‘price dislocation’ is a buying opportunity
It is worth noting that the last time the ETH/USD pair faced rejection at this level was in December 2024, preceding a 66% price decline, as illustrated in the chart below.
Bulls must push and maintain the price above $4,000 to secure a recovery.
“This level has been challenging for the bulls and is essential in the short to mid-term,” noted analyst Daan Crypto Trades in a recent X post.
A decisive close above this threshold will place ETH “back into the prior price range and move past these lows,” the analyst added:
“It’s going to be a tough battle around the ~$4.1K mark.”
This level “will determine if this pullback turns into a significant correction or a brief reset,” commented fellow analyst Jas Crypto, adding:
“If bulls defend $4K, momentum might rebuild towards $5K.”
As reported by Cointelegraph, bulls must elevate the Ether price above the $4,000-$4,300 supply zone to indicate a new uptrend.
Absence of new buyers holds ETH below $4,000
Ether’s ability to stay above $4,000 appears limited currently due to a lack of buyers.
The spot volume delta metric, which indicates the net difference in buying and selling trade volumes, shows that net spot buying on exchanges remains negative, despite recent recovery efforts.
This suggests that any price rebound might not have the sustaining momentum from consistent buying pressure, potentially leading to a deeper pullback.
Without genuine demand, any breakout attempt could lack the necessary strength to elevate ETH above critical levels.
Demand for spot Ethereum ETFs has also declined, with these investment products experiencing outflows six out of the last eight days, according to data from SoSoValue.
On Monday, Ether ETFs alone lost $145.7 million, bringing total net outflows over the previous eight days to $640.5 million.
ETF inflows need to recover, and new ETH buyers must emerge for bulls to have a chance to reach $5,000.
Ether’s bear flag pattern targets $3,100
ETH price is anticipated to continue its bearish trend following the confirmation of a traditional bearish setup.
Ether’s price movement over the past two weeks has led to the formation of a bear flag pattern on the 12-hour chart, as depicted in the figure below. The price fell below the lower boundary of the flag at $4,000 on Tuesday, indicating the commencement of a notable breakdown.
The estimated target from the flagpole’s height is around $3,120, representing a 20% fall from the current price.
The relative strength index remains below the 50 mark, suggesting that market conditions still favor downward movement.
Despite this negative outlook, traders maintain optimism regarding Ether’s potential for an upward shift, pointing to bullish signals from credit conditions and ongoing purchasing by Ethereum treasury companies.
Analyst Jelle remarked that Ether is simply retesting a key breakout point near $4,000 before resuming its upward trend.
“This appears quite ready for rapid growth.”
Assessing the sentiment on CT, one might think $ETH is struggling – but it’s merely holding the breakout area as support.
This seems primed for rapid progress upwards.
Shakeouts seem effective. pic.twitter.com/IUpfnpf5VQ
— Jelle (@CryptoJelleNL) October 15, 2025
This article does not constitute investment advice or recommendations. Every investment and trading move carries risks, and readers should undertake their own research before making decisions.
