Ethereum Faces Sharp Drop and Manipulation Fears as $3,300 Resistance Holds Strong

• Ethereum’s sudden breakdown hints at manipulation, with market makers absorbing panic-seller liquidity before a sharp rebound.
• ETH faces strong resistance at $3,300—failing to reclaim it may lead to a prolonged downtrend and new high-timeframe support levels.
• Ethereum’s long-term prospects are still bright, with regulatory clarity and a potential bull run in sight, despite the short-term volatility.

There have been changes in Ethereum’s price activity which has traders worried. The market had been holding a crucial high-timeframe (HTF) support level for an extended period. However, the recent breakdown suggests a change in trend. The move occurred suddenly over an illiquid weekend, catching many off guard. This sharp decline triggered panic selling, with market makers (MMs) acting as counter-parties.

Price Manipulation and Market Sentiment

The price movement suggests potential manipulation as MMs absorbed liquidity from panic sellers. Soon after, Ethereum bounced back by 35% in a single day. However, this bounce occurred at the previous support, now turned resistance, a critical level for traders. 

Market makers managed to close the daily candle green, creating an illusion of recovery. Moreover, Eric Trump’s tweet endorsing ETH at the wick top added to the bullish sentiment. Yet, experienced traders remain cautious, recognizing this as a potential liquidity grab.

Technical Analysis and Future Projections

Ethereum previously followed a structured pattern of support and resistance retests before making decisive moves. Historically, major wicks tend to get filled over time, making the current rebound uncertain. The failure to sustain support around the key “1-2-3” structure resulted in a breakdown. Consequently, Ethereum now faces a critical juncture. If it fails to reclaim $3,300, further downside remains probable.

Besides, two key scenarios exist. First, if Ethereum experiences a historic manipulation event, it would need a rapid V-shaped recovery. Reclaiming the $3,300 level is crucial for this bullish outlook. Otherwise, a prolonged downtrend could lead to new HTF support levels before stabilizing. Traders anticipate a fast restart rather than extended consolidation.

Market Outlook for 2025

Long-term sentiment remains optimistic despite the correction at hand. Crypto regulatory clarity is still developing, but very slowly. The market has not experienced a full-fledged bull run as with Bitcoin. Thus, Ethereum’s dip seems more of a mid-cycle correction than a protracted bear market. However, traders must adapt to current conditions and respect the loss of trend.