🕒 Posted on: 12/1/2025 2:01:43 PM UTC

Ethereum's Rally Stalls as 8% Drop Puts Critical Support Levels in Focus

Ethereum’s recent surge toward $3,000 has abruptly reversed, with an 8% decline shifting market attention to crucial support zones that could determine the asset's medium-term trajectory.

Introduction: A Rally Meets Resistance

Ethereum’s attempt to sustain a rally into the psychologically significant $3,000 zone has faltered. The market reacted to a dense cluster of liquidity and the prevailing downtrend structure, leading to a sharp rejection. This price action has stalled the upward momentum, refocusing analysts and traders on key technical support levels. Both chart analysis and on-chain liquidation data indicate that ETH remains in a corrective phase, approaching a critical decision point that could dictate its path for the coming weeks. The failure to hold gains near $3,000 underscores the ongoing battle between buyers and sellers, with broader market structure still leaning bearish.

Technical Breakdown: The Daily Chart Perspective

Ethereum continues to trade below both the 100-day and 200-day moving averages, a configuration that confirms a medium-term bearish market structure. The breakdown from the $3,200 level initiated a sustained correction that carried the price down toward the $2,630–$2,680 decision point. This zone represents the final significant high-timeframe (HTF) support area before the broader macro accumulation range.

The recent price action saw an attempt to reclaim the descending trendline on the daily chart, but this effort failed. This failure reinforces bearish order flow, suggesting that sellers remain in control at key resistance levels. For the bearish structure to be invalidated, Ethereum would need to recover above the $3,200–$3,350 region and print a structurally higher high. Until that occurs, rallies into the mid-range are likely to encounter supply absorption rather than sparking a continuation upward.

The implications of a breakdown are clear. If the current daily support around $2,630–$2,680 fails to hold, the next major target becomes the $2,110–$2,200 macro demand zone. This area acts as a logical liquidity magnet and represents the high-timeframe accumulation area from which Ethereum’s previous multi-month rally originated.

Short-Term Structure: Insights from the 4-Hour Chart

A closer look at lower timeframes provides granularity on the recent rejection. Ethereum has rejected sharply from the $3,030–$3,080 supply zone. This rejection occurred at a confluence of technical factors: a dense liquidity cluster, a bearish 4-hour order block, and the descending trendline acting as dynamic resistance. The sharp sell-off that followed confirms that sellers continue to dominate during rallies into this structure, maintaining the broader downtrend that has been in place since early November.

The short-term structure shows a clear deviation. Price reached the boundary of a micro ascending channel but failed to secure a breakout. This resulted in a swing failure pattern that triggered an impulsive decline back below the trendline. This behavior is significant because it aligned with an absence of strong spot demand, suggesting that buyers in this move were reactive rather than initiative-driven.

Looking ahead, analysts note a liquidity void between $2,750 and $2,800, which stands as the next immediate downside target if nearer support at $2,820 gives way. Beneath that, the $2,630–$2,680 zone remains the major short-term demand block where stronger buying interest previously absorbed sell pressure. For any bullish momentum to return, Ethereum must first reclaim the $3,030–$3,080 imbalance and achieve a decisive break above the descending trendline. Such a move could shift momentum back toward the $3,450–$3,550 region.

Market Sentiment and On-Chain Liquidation Data

Beyond pure price charts, on-chain data provides critical context for understanding market positioning and potential pain points. The one-month liquidation heatmap shows significant leverage concentrations between $3,200 and $3,600. This clustering reflects a buildup of long positions that have repeatedly been trapped during each corrective wave. As prices approach these levels, they interact with these dense liquidation bands, triggering cascading sell orders from liquidated leveraged positions. This mechanism generates heavy sell pressure and has been a primary factor preventing sustained upside continuation.

This top-heavy leverage profile directly aligns with the rejections observed in the technical structure. Each attempt to push above the $3,000 threshold has run into these liquidation bands, leading to rapid reversals. It creates a self-reinforcing cycle where optimism meets leveraged overextension, resulting in corrective sell-offs.

Conversely, the region beneath the current price shows far less liquidation density until the $2,400–$2,500 range. This relative absence of support liquidity implies that if the critical $2,630–$2,680 decision point breaks, selling pressure could accelerate swiftly toward the larger macro demand block lower down. Overall, this on-chain positioning paints a picture of a market where seller control is reinforced by poorly placed long leverage, while deeper, more substantive buy-side liquidity sits significantly lower.

Historical Context and Previous Market Behavior

Understanding Ethereum's current position requires glancing at recent history. The broader downtrend referenced has persisted since early November, establishing a series of lower highs that define the current bearish structure. The $2,110–$2,200 macro demand zone is not an arbitrary level; it is historically significant as the accumulation area that fueled the previous major rally. A retest of this zone would represent a full cycle back to a prior launching pad for bullish momentum.

Furthermore, reactions at key moving averages like the 100-day and 200-day have consistently acted as bellwethers for medium-term sentiment. Prolonged trading below these averages has typically coincided with extended corrective or consolidative phases throughout Ethereum's history. The current failure to reclaim the descending trendline mirrors past instances where such failures led to tests of deeper support levels.

Strategic Conclusion: Navigating the Decision Point

Ethereum stands at a technical crossroads. The failed rally and subsequent 8% drop have brought critical support levels into sharp focus. The immediate battle will be fought around the $2,630–$2,680 decision point. A firm hold here could set the stage for another attempt at overcoming overhead resistance near $3,000. However, the prevailing technical structure—characterized by trading below key moving averages and beneath a descending trendline—along with on-chain data showing top-heavy leverage concentrations, suggests bears currently have the upper hand.

For professional traders and investors monitoring Ethereum:

Watch for defense at $2,630–$2,680. A strong bullish reaction here would be the first sign of potential stabilization.
Monitor for any reclaim of $3,030–$3,080. A sustained break above this zone and the descending trendline is necessary to shift short-term momentum positively.
Observe on-chain liquidation clusters. The dense liquidity between $3,200 and $3,600 will remain a formidable barrier for any rally until it is either absorbed or cleared.
Be aware of lower liquidity pockets. The path toward the $2,400–$2,500 range and ultimately the $2,110–$2,200 macro zone could see accelerated moves if key supports break.

The broader takeaway is one of caution within a defined downtrend. While Ethereum's long-term fundamentals remain distinct from its short-term price action,the current market structure demands respect for key technical levels and an understanding of how leveraged positions are influencing price movements at specific thresholds. The coming days will be crucial in determining whether this correction deepens or finds footing for a reversal.

Disclaimer: Information found in this analysis is based on technical data and on-chain metrics provided by sources such as TradingView and CryptoPotato writers. It does not constitute investment advice. You are advised to conduct your own research before making any investment decisions.