Ethereum faces a correction toward 3,500 USD amid technical pressure, capital outflows and macro risks

Ethereum looks poised for a potential pullback toward the $3,500 level, as technical selling, institutional outflows, and broader macroeconomic uncertainty converge. With weakening spot demand and key support zones under pressure, ETH appears vulnerable to a deeper retest in the near term.

Technical outlook and key support zones

Critical support lies near $4,200 and then $4,000. A break below these levels could trigger accelerated selling toward $3,500. Recent price action has shown consistent resistance around higher levels, suggesting that sellers remain in control—making a move downward increasingly likely if these supports don’t hold.

Flows and institutional sentiment

Institutional products like ETH ETFs have seen consistent outflows, reducing buy-side pressure and market liquidity. This—coupled with ETH’s strong correlation to Bitcoin—means any weakness in BTC tends to magnify downward moves in Ethereum, especially during risk-off market environments.

Counterweights and on-chain fundamentals

Not all signals are negative. On-chain data shows some accumulation, declining exchange reserves, and strong network fundamentals—all of which may help cushion a steeper decline. Reduced sell-side liquidity and interest from larger holders near current levels also suggest some see value in these prices. Longer-term, Ethereum’s role in DeFi and ongoing upgrades continue to support its utility.

Trading implications and risk management

Traders should prioritize clear risk management—setting stop-losses and profit targets—especially if $3,500 fails to hold. A break below could open the door to $3,000. For long-term believers, however, a dip may present a accumulation opportunity. Keeping an eye on macro trends and regulatory news remains essential.