Analyst Ananda Banerjee recently reported that the January high of $3,390 is currently under significant threat. Recent Ethereum price momentum signals indicate a weakening trend despite the asset remaining within its established bullish rising channel.
This assessment follows a price slip of roughly 3.2% within the last twenty-four hours. Consequently, investors are becoming increasingly wary of a potential reversal near current price levels. Furthermore, the inability to breach the upper channel boundary suggests a lack of buying conviction. The market is now looking for a catalyst to define the next major move.
The primary concern for technical analysts involves the visible loss of strength in recent price movements on the daily chart. While the overall structure remains technically bullish, the Relative Strength Index has started displaying alarming dual bearish divergences.
This momentum indicator compares recent gains to recent losses to identify overbought or oversold conditions. Price action failed to surpass the previous upper boundary set in December, creating a sense of exhaustion. Because the RSI made a higher high during that period, the price failed to respond appropriately. This creates a disconnect between buying pressure and actual price appreciation in the short term.
Between early January and mid-month, the ETH price pushed slightly higher again, but the RSI formed a lower high. This second signal confirmed a standard bearish divergence, which often appears near trend exhaustion zones. Moreover, this specific combination often points toward a hidden bearish pressure that the broader market might be overlooking.
A loss of momentum across both the broader swing and the recent push is concerning. Whereas the structure remains intact, the risk of the January peak holding as resistance has grown substantially. Traders are now watching to see if buyers can regain control quickly.
The resilience of the current structure depends on whether participants can defend the lower trendline effectively.
On-chain metrics provide a more nuanced view of the current situation regarding holder behavior on the blockchain. The Net Unrealized Profit/Loss metric indicates that most Ethereum holders are currently sitting on significant unrealized gains.
Even after the recent pullback from the January peak, the NUPL has remained remarkably stable. This metric only dipped slightly from 0.31 to 0.30 recently, which represents a very small decline. Since profit-taking incentives remain elevated, any further price weakness could trigger a wave of selling from cautious market participants. However, the actual movement of coins suggests a different story regarding current investor psychology.
Despite the high incentive to take profits, the volume of spent coins has collapsed significantly in recent days. Data shows that spent coin activity across various age cohorts has dropped by nearly seventy-four percent recently.
Specifically, activity fell from 318,000 ETH to a monthly low of roughly 84,300 ETH. This suggests that spot holders are choosing to absorb the current price dip rather than panic selling. Therefore, the current market sentiment remains characterized by a patient approach among long-term investors. They appear to be waiting for clearer signs before making large moves.
Will the lack of panic selling among spot holders protect the critical support?
The third force acting on the market involves the high concentration of leveraged long positions near support. Currently, heavy long leverage represents a localized risk near the three thousand fifty dollar level for the asset. If this support fails, a cascade of liquidations could rapidly accelerate the downward price movement.
Whereas the spot market stays calm, the derivatives market could become a source of sudden volatility for the entire sector. A break below this level might trigger automated sell orders that overwhelm current buy interest. For this reason, maintaining the price above the critical support zone is essential for market stability.
Looking ahead, the interaction between leveraged traders and patient spot buyers will define the coming weeks for Ethereum. If Ethereum price momentum signals do not improve quickly, the risk of a deeper retest remains quite high. Traders should keep a close eye on the three thousand fifty dollar zone as a decisive marker.
Ultimately, maintaining the bullish structure will depend on renewed buying conviction to overcome the exhaustion signals. The market remains in a fragile state while it digests the gains made earlier this month. Investors should prepare for increased volatility as the price approaches the channel floor in the near future.
