- Ethereum’s trading volume has plunged 85%, raising concerns of weak demand and price vulnerability.
- Analysts warn ETH could retest the $3,500–$3,800 demand zone before staging a recovery.
- Bearish sentiment is peaking, but history suggests this could be an opportunity for contrarian buyers.
Ethereum (ETH) is once again caught in a tight range, hovering between $4,200 and $4,500 for nearly two weeks. While that might sound stable, the mood among traders is shifting fast—many are now calling for a deeper correction that could drag ETH down toward $3,500 before any real rebound kicks in.
Market Sentiment Turns Bearish
The chop in Ethereum’s price comes right after Bitcoin slipped below $100,000, and the change in sentiment has been noticeable. According to data from Santiment, bearish chatter on social platforms has exploded, with terms like “selling” and “bearish” dominating the conversation. Traders are increasingly betting on Ethereum slipping under $3.5K, adding fuel to the bearish narrative.
But here’s the twist: markets have a history of moving against the crowd. Santiment even hinted that this wave of negative sentiment could end up being the perfect contrarian buy signal if history repeats itself.
Weak Spot Demand Adds Pressure
The real red flag comes from Ethereum’s trading activity. Spot demand has collapsed, with daily trading volume plunging from $18.5 billion in late August to just $2.6 billion by Sept. 8—an 85% drop, Glassnode data shows. That collapse points to waning conviction among buyers.
Spot volume delta has ticked up slightly, showing some relief from the selling wave, but it remains far below August’s levels. Add in the fact that Ethereum ETFs have seen over $1 billion in outflows across six straight trading days, and it’s clear institutions are stepping back too.
How Low Can ETH Go?
Right now, ETH is retesting the lower trendline of its symmetrical triangle at $4,280. A daily close below that could invite heavier selling, potentially driving the token down toward $3,600—or even $3,500 if pressure builds.
Analyst Michael van de Poppe sees the $3,500–$3,800 zone as the key demand area to watch, hinting that one last dip into this “green zone” could set up Ethereum for a strong rally after. Similarly, trader Ted Pillows pointed out heavy liquidity sitting between $3,600 and $4,000, suggesting ETH might sweep lower before any meaningful reversal.
If support at $4,000 breaks, another bounce level to watch is around $3,745. Until then, traders are bracing for turbulence.
