Ethereum suffered a significant pullback this week, but analysts remain confident that the leading altcoin is gearing up for a major breakout. Despite falling below $4,000, traders insist the long-term structure remains bullish, with potential to reach new all-time highs near $10,000.
ETH Price Drops Amid Heavy Liquidations
Ether fell more than 8%, slipping from highs above $4,300 on Monday to trade around $3,940 on Tuesday. The decline triggered widespread market liquidations. Data from CoinGlass revealed that over $650 million in leveraged crypto positions were wiped out within 24 hours, including $455 million in long positions.
Ether alone accounted for approximately $114.5 million in long liquidations, signalling that many traders were unprepared for the drop below $4,000. One of the largest single liquidation events occurred on the OKX exchange, involving an ETH/USD position worth $5.5 million.
Despite the sell-off, the liquidation heatmap highlighted strong buying interest between $3,670 and $3,800, suggesting a potential support zone that could halt further declines.
Analysts Maintain Bullish Outlook
Market experts argue that Ethereum’s price action reflects a technical correction rather than the end of its uptrend. Michael van de Poppe, founder of MN Capital, noted that the ETH/BTC pair recently touched 0.032, which he identified as an “ideal zone for buys”. He stated that Ether now needs to form a higher low before targeting new highs.
Analyst Daan Crypto Trades added that while the 0.032 level has held, ETH must reclaim the 0.041 BTC level to confirm bullish continuation. Meanwhile, Titan of Crypto pointed to a breakout in the relative strength index (RSI) from a multi-year downtrend, signalling a potential major upward move.
According to Titan, if historical fractals repeat, Ether could reach between $8,000 and $10,300, supported by Fibonacci projections.
Key Support at $3,800 Critical
Trader Chimp of the North suggested that Ethereum’s retracement may extend to the $3,800 support level before any renewed rally. A successful retest could pave the way for a move towards $5,000 and beyond in the coming weeks.
Recent market stability following Friday’s flash crash in Ethereum futures has also raised expectations for a rebound to around $4,500 in the near term.
Bull Flag Points to $10,000 Target
On the weekly chart, Ethereum remains within a bull flag formation, a continuation pattern that typically appears after strong price rallies. The price is currently testing the lower boundary of the flag near $3,870, which acts as immediate support.
A confirmed breakout above the upper trendline at $4,440 would validate the pattern and open the path towards the bull flag’s target of around $10,050, a potential 164% rise from current levels.
However, the RSI has cooled to 54 from 74 over the past seven weeks, indicating that the correction phase may continue as traders take profits. A daily close below $3,800 could expose Ether to further downside, with potential declines towards the 20-week SMA at $3,700 and possibly $3,500.
Outlook: Correction or Consolidation?
While short-term sentiment has turned cautious, the underlying trend remains intact according to major analysts. Strong support levels, improving technical indicators and bullish continuation patterns suggest that Ethereum’s long-term trajectory still favours upward movement.
For now, holding $3,800 appears crucial. If buyers defend this zone, the stage may be set for another significant rally, with the $10,000 mark firmly in sight.
