Ethereum Price Stagnates Amid Weakening Demand and Growing Bearish Sentiment
Ethereum (ETH) has been confined within a narrow trading range of $4,200 to $4,500 over the past two weeks. This consolidation phase coincides with a notable decline in both spot market activity and institutional interest, prompting growing bearish sentiment among traders who anticipate a potential dip to $3,500 before any meaningful recovery.
Market Sentiment Shifts Negative
Market intelligence firm Santiment reports a marked increase in bearish indicators following Ether’s failure to sustain its late August peak near $4,950. The firm highlights a surge in social media mentions of terms like “selling” and “bearish,” reflecting traders’ expectations that Bitcoin could fall below $100,000 and Ethereum might retreat beneath $3,500.
While crowd sentiment often serves as a contrarian indicator, the prevailing negative mood underscores the immediate challenges ETH faces amid broader crypto market volatility.
Spot Volume Decline Signals Waning Investor Participation
Data from Glassnode reveals an 85% drop in Ethereum’s spot trading volume, from $18.5 billion on August 22 to $2.6 billion by September 8. This sharp decrease suggests diminishing investor conviction and lower demand for ETH in the short term.
Although the cumulative volume delta (CVD)—which measures net buying versus selling pressure—has shown slight improvement, it remains significantly below August levels. This combination of low volume and subdued buying interest heightens ETH’s vulnerability to downward price pressure.
Compounding this, institutional investors have retreated, with spot Ethereum ETFs experiencing over $1 billion in net outflows across six consecutive trading days, intensifying selling pressure.
Technical Analysis Points to Key Support Tests
Technically, ETH is currently testing the lower boundary of a symmetrical triangle pattern near $4,280 on the daily chart. A decisive close below this level could trigger intensified selling, potentially driving the price down to $3,600—a 16% decline from current levels.
Michael van de Poppe, founder of MN Capital, anticipates a further correction into the $3,500–$3,800 demand zone before a rebound materializes. Similarly, analyst Ted Pillows notes the presence of substantial liquidity clusters between $3,600 and $4,000, suggesting that a sweep of these levels may occur prior to any recovery.
Additional support around $3,745 has been identified as a possible bounce point if the $4,000 level fails to hold.
Conclusion
Ethereum’s price action reflects a cautious market grappling with lower demand and growing bearish sentiment. While technical indicators warn of a potential drop to the $3,500 region, the clustered liquidity zones in this range could provide a foundation for a reversal. Investors should remain vigilant, as ongoing macroeconomic uncertainties and institutional flows will significantly influence ETH’s near-term trajectory.
Disclaimer: This article does not constitute investment advice. Trading and investing in cryptocurrencies involve risk, and readers should conduct their own due diligence.
FinOracleAI — Market View
The current Ethereum price stagnation combined with sharply declining spot volumes and institutional outflows suggests heightened downside risk in the near term. Technical analysis supports a possible correction toward $3,500–$3,600 levels, where liquidity clusters may provide support and a potential reversal point. Market sentiment remains bearish, increasing downside pressure, but a stabilization of buying interest in these zones could signal a buying opportunity. Key risks include broader crypto market volatility and macroeconomic factors influencing investor appetite.
Impact: negative
