Ethereum’s Recovery Faces Critical Test as Technical Pattern Emerges

Ethereum CRYPTO000ETH

Wednesday brought a welcome respite for Ethereum investors as the cryptocurrency surged back above the psychologically significant $3,000 threshold. This rebound follows weeks of downward pressure that saw the digital asset decline more than 26% from its monthly peaks. However, beneath this short-term recovery lies a concerning technical development that could signal further turbulence ahead.

Despite technical headwinds, institutional interest in Ethereum continues to demonstrate remarkable resilience. U.S. spot Ethereum ETFs recorded net inflows for the fourth consecutive day on November 26, attracting $60.82 million in fresh capital. The cumulative inflows for these investment vehicles have now reached $12.87 billion, underscoring sustained institutional confidence.

This persistent demand from major investors may serve as a buffer against potential price declines, suggesting many professional traders view recent weakness as a buying opportunity. The critical question remains whether these substantial ETF inflows can overcome the challenging technical signals now appearing on Ethereum's charts.

Ominous Technical Signals Flash Warning

The recovery momentum masks a significant technical concern: Ethereum has formed what market technicians call a "Death Cross," with the 50-day moving average dropping below the 200-day moving average. This pattern typically serves as a longer-term cautionary signal and often precedes extended consolidation phases or further price deterioration.

Market analysts have also identified a megaphone formation on daily charts, indicating heightened volatility conditions. The crucial resistance level now sits between $3,100 and $3,180. A decisive breakout above this zone could potentially pave the way for advances toward the $3,550 to $3,650 range. Conversely, failure to maintain current levels might trigger a retest of key support areas.

Critical Price Levels to Monitor:

• Resistance: $3,100 – $3,180
• Support: $2,800 – $2,900
• Critical Support Zone: $2,500 – $2,650

The ongoing battle between robust institutional demand and concerning technical indicators leaves Ethereum at a crossroads. While the return above $3,000 offers temporary relief, the emergence of bearish chart patterns suggests the path to sustained recovery may prove challenging. Market participants now watch closely to see whether fundamental demand can triumph over technical warnings or if Ethereum faces an extended period of price consolidation.