Ethereum is once again under scrutiny from traders and analysts as a key technical indicator, the MACD, has issued a fresh bearish signal on its weekly chart. This development has raised concerns of a potential repeat of past significant price declines, where similar signals preceded drops of nearly 60 percent.
Historical MACD Signals Point to Caution
The Moving Average Convergence Divergence (MACD), a popular momentum indicator, helps traders assess trend strength and direction. On Ethereum’s weekly chart, the MACD line has crossed below the signal line, an occurrence that has historically marked the start of steep declines.
Analysts note that a bearish cross in early 2025 was followed by an over 60 percent decline in Ether’s price within weeks. Likewise, a similar cross in mid-2024 led to losses of around 46 percent. The latest signal in October has therefore raised fears of another major correction.
Crypto analyst CRYPTO Damus remarked on X that this is the fourth such occurrence, stating he is “not liking this Ethereum weekly MACD cross to red after 22 weeks green.” Another analyst, Titan of Crypto, advised investors to be prepared for “any scenario” if the signal confirms a sustained trend.
Critical Support at $4,000 in Focus
Ether is currently testing a crucial support zone around $4,000. This level has acted as a foundation since early August and is seen as pivotal to maintaining any bullish structure. Should the price remain above this region, analysts believe a recovery towards $5,000 remains possible.
However, a drop below this level could trigger a deeper retracement. Historical precedent adds weight to this warning. When Ethereum last fell below $4,000 in December 2021, it entered a prolonged decline of 78 percent, eventually bottoming near $880 during the 2022 bear market.
Analysts Warn of Potential Breakdown
Technical voices remain divided but cautious. Elliott Wave analyst Man of Bitcoin emphasized that “as long as ETH price holds above the $3,899 support level, a direct move to the upside remains possible.” Yet he also cautioned that any break beneath it could indicate a larger correction unfolding.
Trader Koala echoed similar concerns, noting that Ethereum appears to be in a “weekly breakdown and trend loss” after failing to hold support at $4,200. He added, “We will likely see downward acceleration sooner than later,” pointing to increased bearish momentum.
Broader Sentiment Weighs on Bulls
The return of bearish technical signals arrives at a time when overall market sentiment is fragile. Although long-term investors remain optimistic about Ethereum’s potential, short-term traders are closely monitoring the descending channel on the daily chart. Bears are reportedly targeting a move below $3,745, the lower boundary of this channel, to confirm a deeper decline.
For bulls, defending the $4,000 region is essential. Failure to do so could invite trend-following sellers and widen losses, especially if macroeconomic uncertainty persists across the wider cryptocurrency market.
Outlook: Critical Weeks Ahead
The coming weeks may determine Ethereum’s medium-term trajectory. While some analysts still foresee a possible recovery rally towards $5,000 if support holds, the reappearance of the bearish MACD cross suggests growing downside risk. Traders are urged to remain vigilant and manage exposure carefully, as Ethereum tests one of its most significant technical levels of the year.
