Ethereum’s bullish structure has started to show early signs of exhaustion as the price retraces from the $4,400 resistance zone. Despite maintaining a strong mid-term uptrend, short-term momentum has weakened after a local bearish divergence and a recent market structure shift.

The next few days will be key to determining whether this is just a healthy correction or the start of a deeper pullback.

Technical Analysis

By Shayan

The Daily Chart

On the daily timeframe, ETH remains inside a long-term ascending channel but has once again failed to break through the $4,800 resistance area. The asset is now dropping toward the channel’s lower trendline and the 100-day moving average at $4,000.

The RSI has also cooled to 49, indicating that bullish momentum has faded for now but hasn’t turned bearish yet. As long as the structure holds above $4,000, the broader trend remains intact. However, losing that level could open the door for a deeper move toward $3,400, where the next significant demand zone lies.

The 4-Hour Chart

In the 4-hour view, ETH has confirmed a Market Structure Shift (MSS) after failing to sustain higher highs near $4,800. A clear bearish divergence on RSI supported this move, showing momentum loss before the drop. The price has now entered a short-term corrective phase and could revisit the $4,200–$4,100 zone, which aligns with previous demand.

For buyers to regain control, ETH needs to reclaim $4,500 and invalidate the recent lower-high formation. Until then, short-term bias remains slightly bearish within the context of the broader bullish channel.

Sentiment Analysis

Open Interest

Open interest across all exchanges remains elevated at around $28.5 billion, showing that derivatives traders are still heavily positioned despite the recent pullback. This suggests strong speculative interest, but it also means the market is vulnerable to liquidations if volatility increases.

If open interest continues to stay high while price trends lower, it could trigger a cascade of forced long liquidations before a proper bottom forms. On the flip side, a gradual cooling of open interest during this correction would signal healthy resetting of leverage, potentially setting the stage for ETH’s next leg higher.