Ethereum continues to face considerable pressure across both higher and lower timeframes following the rapid loss of several key technical levels. While the recent rebound from the local bottom around $1.5K has provided some short-term relief, the broader structure still favours sellers unless ETH can reclaim a series of key resistance zones overhead. Moreover, the rising put/call ratio indicates a heightened sense of caution and a growing demand for downside hedging among options participants, rather than an increase in bullish exposure. The daily chart indicates a significant breakdown from a multi-month bearish flag that has been forming since February. After consistently finding support along the ascending lower trendline, ETH ultimately broke the structure and accelerated downward in a clear, measured movement. The sell-off initiated as the price faced rejection from the long-term descending trendline around the $2.4k mark, subsequently driving the asset below the 100-day moving average. The 100-day moving average, presently near $2.1K, has transitioned into a resistance level. Meanwhile, the 200-day moving average remains notably elevated near $2.4K. This suggests the general robustness of the prevailing downtrend. Following the breakdown, ETH penetrated the significant support zone at approximately $1.8K.
This area previously functioned as a robust demand zone and is now expected to act as resistance against any recovery efforts. A bearish Fair Value Gap was also formed at approximately the $1.9k area, indicating another supply zone where sellers may re-enter the market in the event of a retest. The recent decline ultimately encountered demand near the $1.5K support level, leading to a relief bounce. However, despite recovering from the lows, ETH remains confined below the previous support area and has not yet negated the bearish breakdown. As long as the price stays beneath the $1.8K-$1.9K resistance cluster, the overall perspective remains prudent. While the RSI has rebounded from oversold conditions, it continues to stay below bullish territory. It suggests that momentum has shown improvement, yet it has not yet transitioned clearly in favour of buyers. On the 4-hour timeframe, ETH underwent a significant impulsive drop from the $2K area before locating support at the $1.5K demand zone. The subsequent bounce seems to be corrective rather than impulsive, suggesting that buyers have not yet regained control of the trend.
The market is currently trading around $1.68K, remaining below the 0.5 Fibonacci retracement level at approximately $1.76K. Above that, a dense resistance cluster exists between the 0.618 and 0.786 retracement levels, stretching from approximately $1.8K to $1.9K. This Fibonacci zone aligns closely with a key bearish order block formed during the recent sell-off, making it a critical battleground. Any recovery into this range could draw renewed selling pressure from market participants aiming to exit losing positions. On the downside, the $1.5K support area remains the most critical level. Losing this area would likely heighten the chances of another downward movement and affirm that the recent rebound was simply a brief interruption in the overarching downtrend. The derivatives chart illustrates the recent week’s ETH options activity on Deribit, showcasing the Put/Call volume ratio. Earlier in the week, the ratio fell below 1, signalling that call volume was starting to surpass put volume. This is a classic indication of enhancing trader sentiment.
More recently, however, the ratio has surged sharply toward 1.7, while overall daily volume remains relatively subdued. This indicates a notable rise in put activity compared to calls. Consequently, there is an increasing need for downside protection, even in light of ETH’s recent short-term recovery. The divergence between recovering price action and rising put demand indicates that options traders are exercising caution regarding the sustainability of the current bounce. In summary, although spot buyers have entered the market near the $1.5K level, those involved in derivatives are continuing to hedge in anticipation of a potential further decline. For sentiment to improve significantly, ETH would likely need to reclaim the $1.8K-$2K resistance region while the put/call ratio starts trending lower once more. Until then, the options market indicates that traders are adopting a cautious stance, even in light of the recent recovery effort.