Key takeaways:
Decreasing spot purchases and rising outflows from spot Ethereum ETFs indicate weak demand, potentially leading to further losses for Ether.
Ether’s bear flag suggests a 20% price decline to $3,100.
Ether (ETH) dropped to $3,800 on Tuesday, unable to maintain the $4,000 level as spot Ethereum ETF investors continued their net withdrawals. This occurred as the technical setup indicated a more significant correction for ETH price.
Ether price faces “strong resistance” at $4,000
Ether’s 16% recovery from a low of $3,500 on October 11 was cut short by selling around the critical $4,000 psychological barrier.
This indicates that “there is a strong resistance at $4K,” stated trader Philakone in a recent X post.
Related: BitMine’s Lee states Ether’s ‘price dislocation’ signals a buying opportunity
It’s noteworthy that the last time the ETH/USD pair was rejected from this zone was in December 2024, preceding a 66% price drop, as illustrated in the chart below.
Bulls must, therefore, push and maintain the price above $4,000 to secure the recovery.
“This has been a challenging level for the bulls to overcome and is quite critical in the short to mid-term going forward,” commented analyst Daan Crypto Trades in a recent X post.
A conclusive daily candlestick close above this level will bring ETH “back into the previous price range and leave these lows behind,” the analyst noted, adding:
“An interesting battle is anticipated around the ~$4.1K level.”
This level “determines whether this pullback turns into a deeper correction or remains a brief reset,” said fellow analyst Jas Crypto, adding:
“If bulls defend $4K, momentum could rebuild toward $5K.”
As Cointelegraph reported, bulls need to drive the Ether price above the $4,000-$4,300 supply zone to signal the beginning of a new uptrend.
Lack of new buyers keeps ETH below $4,000
Ether’s capacity to remain above $4,000 seems limited for now due to the lack of buyers.
The spot volume delta metric, which measures the net difference between buying and selling volumes, shows that net spot buying on exchanges remains negative, despite recent recovery attempts.
This indicates that any price rebound may lack the momentum from consistent buying pressure, potentially leading to a more substantial pullback.
Without genuine demand, any breakout attempt might not have the strength needed to push ETH above significant levels.
Interest in spot Ethereum ETFs has also been declining, with these investment products experiencing outflows six out of the last eight days, according to data from SoSoValue.
On Monday alone, Ether ETFs lost $145.7 million, raising total net outflows over the past eight days to $640.5 million.
ETF inflows need to return, and new ETH buyers must emerge for the bulls to have a chance of reaching $5,000.
Ether’s bear flag breakdown targets $3,100
ETH price is anticipated to resume its prevailing bearish momentum following the confirmation of a classic bearish pattern.
Ether’s price movement over the last 14 days has created a bear flag pattern on the 12-hour chart, as displayed in the figure below. The price fell below the lower boundary of the flag at $4,000 on Tuesday, signaling the onset of a significant breakdown.
The measured target from the flagpole’s height is approximately $3,120, translating to about a 20% drop from the current price.
The relative strength index remains below the 50 mark, indicating that market conditions still favor the downside.
Despite this bearish perspective, traders maintain optimism regarding Ether’s upside potential, citing bullish signals from credit conditions and ongoing purchases by Ethereum treasury companies.
Analyst Jelle mentioned that Ether is merely retesting a critical breakout level around $4,000 before continuing its upward trajectory.
“This appears very set for a swift upward expansion.”
From the sentiment on CT, you’d assume $ETH is in a bad place – but it’s just maintaining the breakout area as support.
This looks poised for a rapid increase.
Shakeouts seem effective. pic.twitter.com/IUpfnpf5VQ
— Jelle (@CryptoJelleNL) October 15, 2025
This article does not serve as investment advice or recommendations. Every investment and trading action carries risks, and readers should conduct their due diligence when making decisions.
