Ethereum’s recent price action has raised doubts about its ability to sustain recovery above $4,000, as weak onchain activity and sluggish futures demand continue to weigh on sentiment. Despite a brief rally earlier this week, Ether’s performance suggests traders remain cautious, with analysts warning of a possible retest of $3,500.

Ether stalls below $4,000 as momentum fades

Ether has hovered around the $4,000 mark for the past two weeks, consolidating after its sharp dip below $3,500 on October 11. The cryptocurrency’s inability to reclaim higher ground reflects a lack of follow-through buying, even after the US Federal Reserve confirmed a 0.25% interest rate cut and the end of its quantitative tightening program.

The muted response has puzzled some traders who expected the Fed’s dovish shift to spark renewed risk appetite. Instead, Ether’s price has struggled to break through resistance, suggesting that macroeconomic optimism alone may not be enough to revive bullish momentum in the crypto market.

Weak futures demand signals cooling trader appetite

One of the clearest indicators of fading enthusiasm lies in Ether’s futures markets. Currently, ETH futures are trading at only a 5% premium compared to spot prices. Under neutral conditions, that premium typically ranges between 5% and 10%, reflecting a healthy balance of leveraged buying interest.

The narrow spread suggests a lack of conviction among traders using leverage, a sign of reduced confidence in a strong price breakout. Even the brief recovery to $4,250 earlier in the week failed to restore sustained bullish sentiment.

Adding to the caution, US-based Ethereum spot exchange-traded funds have seen persistent outflows since mid-October. While ETFs recorded $380 million in net inflows over two days this week, the move barely lifted sentiment, leaving many investors questioning whether the long-touted $10,000 ETH target remains realistic for this market cycle.

Onchain slowdown highlights cooling network demand

Ethereum’s network activity has also slowed noticeably, underscoring reduced demand across the ecosystem. Data shows that total transaction fees collected on the Ethereum network over the past week fell to $5 million, a 16% drop from the previous week.

This decline mirrors a broader slowdown in the crypto market. BNB Chain’s fees plunged 30%, while Tron’s fell 16%. The number of active Ethereum addresses decreased by 4%, even as Tron saw its activity more than double during the same period.

The drop in fees and user activity points to lighter onchain demand, which often translates into weaker price support. For Ethereum, that means fewer transactions driving network revenue and less incentive for traders to hold the token in the short term.

Analysts warn of potential dip toward $3,500

Technical indicators reinforce the cautious outlook. Data from TradingView shows Ether has printed three consecutive daily red candles, signaling continued selling pressure. Multiple recovery attempts have been rejected near the $4,000 mark, suggesting that the level has flipped from support into strong resistance.

“ETH has lost its $4,000 support level again,” analyst Ted Pillows wrote on X, highlighting that the asset’s decline came even after favorable macro events such as the Fed’s rate cut and renewed US-China trade discussions.

According to Pillows, the next major area of support lies around $3,800. A breakdown below that could open the door to further losses toward the $3,500–$3,700 range, and potentially as low as $3,354, which was the August 3 low.

Bulls look to defend key support zone

Still, not all analysts see the recent pullback as a sign of deeper trouble. FibonacciTrading suggested that a dip toward $3,300 could still be considered a “healthy correction” within the broader uptrend, provided the price remains above the exponential moving average (EMA) cloud on the weekly chart.

“It will be a real show of strength if the bulls can defend support here and set up for the next attack on resistance,” the analyst noted.

Others remain cautiously optimistic about the months ahead. Pseudonymous trader Cactus argued that as long as Ether holds the $3,800–$4,200 range, the market could still be on track for a strong fourth quarter. Reclaiming the 50-day simple moving average near $4,200 would be the first sign of renewed bullish strength, potentially setting the stage for a push toward $4,500 and beyond.

Outlook: caution in the short term, optimism for Q4

For now, Ethereum’s price remains trapped between conflicting signals. While macroeconomic conditions and easing monetary policy could provide tailwinds, weak onchain data and soft ETF inflows suggest traders are hesitant to commit to aggressive long positions.

If bulls manage to hold the $3,800 support and reclaim $4,000 soon, confidence could return to the market. But failure to do so may invite a deeper correction, testing whether the crypto’s long-term uptrend can withstand another wave of selling pressure.

Ethereum’s next few sessions could prove pivotal in determining whether the recent slide is merely a temporary shakeout or the beginning of a more prolonged downturn.