- Ethereum’s price falls below $4,200, signaling key support levels that could prompt accumulation for long-term traders.
- Derivatives data indicate aggressive selling, with capitulation patterns suggesting the market is oversold and primed for a potential rebound.
- Traders are closely monitoring the $4,000 to $4,200 range, with a failure to hold these levels potentially triggering further declines.
Ethereum has seen a sharp drop of over 6%, with its price hitting $4,172, marking the lowest level since early August. This significant decline has wiped billions off the cryptocurrency’s market capitalization, now hovering around $505 billion. Despite the sudden downturn, analysts believe the recent dip could set up opportunities for long-term accumulation, especially within key support areas.
Market expert Michael van de Poppe highlighted the $4,100 to $4,000 range as an attractive entry point for long-term investors. Van de Poppe referred to this as a “market flush,” suggesting that the decline presents an opportunity for buyers to accumulate Ethereum at more favorable prices.
His analysis indicated that the loss of short-term momentum creates the conditions needed for accumulation in this price zone.
Derivatives Data Signals Aggressive Selling, Hinting at Capitulation
According to data from CryptoQuant, Ethereum’s open interest on Binance has fallen by 15% since mid-September, signaling a retreat from market participants. Net taker volume has also turned sharply negative, indicating intense sell-side pressure. Funding rates across major exchanges have shifted into negative territory, suggesting that many long positions, bought at higher prices, are being liquidated. This behavior aligns with typical capitulation patterns often seen during oversold conditions.
If Ethereum manages to defend its support near $4,200, a recovery could be on the horizon. Analysts are watching for a potential move towards $5,766, a target aligned with economist Donald Dean’s retracement projection for the ETH/BTC ratio. However, if the price fails to hold above the critical $4,000 level, further declines into the $3,600 to $3,800 range may unfold, with deeper support levels at $2,630 and beyond.
Traders Watch for Accumulation Opportunities
As Ethereum retests high-volume trading shelves around the $4,200 mark, the market’s next steps depend on whether buyers step in to defend this price point. A strong defense could lead to a reversal, pushing ETH toward higher levels. Conversely, a breakdown below $4,000 could force traders to look for new demand zones in the lower $3,000 range, where stronger liquidity may provide additional support.
