Ethereum is stuck between technical deadlock and ETF fund pressure

Ethereum is currently trading at $3.11K, but the market has yet to find a clear direction. With trading ranges narrowing, analysts are awaiting decisive signals from both on-chain data and technical setups.

On-chain reveals warning signs

Capital flows from Ethereum ETF funds in recent periods have been pessimistic. Especially at the beginning of the week, withdrawals from spot Ethereum ETF products exceeded $600 million in total, with a significant outflow from BlackRock’s ETF being a noteworthy signal. This indicates that institutional investors are becoming more cautious about their current positions.

The timing of these withdrawals further undermines the protection of key support levels. As institutions reduce exposure at current prices, selling pressure intensifies, adding short-term risks to the market.

Looking at the chart: Deadlock on both timeframes

On the daily chart, Ethereum is trapped between a prolonged downtrend line above and a crucial support level around $2,500 below. The frustrating part is that every attempt to push higher is met with rejection by this downtrend line, with continuous selling pressure.

However, $2,500 remains a strong defensive wall. Whenever the price touches this level, buying interest steps in, preventing a free fall. As a result, Ethereum is stuck in a narrow trading range, with daily candles lingering here—an indication of a waiting phase for stronger signals.

Zooming into the 4-hour chart, the situation is similar. Although there was an attempt to break upward from a small flag pattern, it was unsuccessful. The price even dipped below support and quickly rebounded, creating a “psychological trap” for many traders. Short sellers got caught off guard, and buyers had limited opportunities—currently just a short-term recovery.

Layer-2 siphoning liquidity from the mainnet

Another phenomenon affecting sentiment is the increasing activity on major Layer-2 projects, with trading volumes surging and transaction fees much lower. This is good for scalability, but bad in the short term—demand for using the Ethereum mainnet is fragmenting, reducing the chain’s overall appeal.

So, what should we do now?

The market is waiting for a strong push to change direction. Key levels will be crucial—if the price breaks below $2,500, risks will spike; if it breaks the downtrend line, Ethereum will have a real chance to break out. Until then, caution remains the safest strategy.