- Ethereum drops 6%, creating a potential opportunity for long-term buyers.
- Key support at $4,000 could trigger Ethereum’s next major surge.
- Derivatives data signals capitulation, hinting at possible market reversal soon.
Ethereum’s price has dropped sharply, losing more than 6% in the past 24 hours and falling to $4,172. This decline has wiped out billions from its market cap, which now sits near $505 billion. While this sudden plunge has raised concerns among retail traders, many analysts believe this dip could be the perfect opportunity to buy, setting the stage for a potential rally.
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Key Support Levels Could Fuel Ethereum’s Next Surge
Market analyst Michael van de Poppe referred to this significant drop as a “market flush,” marking a potential entry point for long-term buyers. He identified the $4,100–$4,000 range as a critical support zone, where buying pressure could help fuel the next phase of accumulation. If Ethereum finds its footing in this area, a major surge could follow, with the price aiming for a substantial recovery.
Looking further ahead, van de Poppe sees $5,766 as the next major target if Ethereum stabilizes. This aligns with the retracement target for the ETH to BTC ratio, which could serve as a critical resistance level in the near future.
Ethereum’s Next Move: Will Support Hold or Will a Deeper Drop Follow?
Ethereum’s price is at a critical juncture, and traders are anxiously watching how it reacts to the $4,200 level. If this support holds, a recovery could be on the horizon, pushing Ethereum toward higher levels. However, if it fails to defend this zone, lower support levels in the mid-$3,000s could become the focus, opening the door for a deeper decline.
Derivatives Data Signals Capitulation Phase
Derivatives data also signals the possibility of a capitulation phase. According to CryptoQuant, Ethereum’s Open Interest on Binance has dropped by 15% since mid-September, indicating a sharp reduction in investor confidence. This is supported by negative funding rates and a surge in short positions, signaling that bearish sentiment is currently dominating the market. Such conditions often precede a major reversal, with the market ready to bounce once support levels are confirmed.
Will Buyers Defend Critical Support Zones?
As Ethereum retests its high-volume shelf near $4,200, all eyes are on whether buyers will defend this critical zone. If Ethereum holds here, it could begin to carve its way back toward higher levels, offering traders an opportunity to capitalize on the potential for a major price surge. However, if the $4,000 level fails to hold, lower support zones in the mid-$3,000s will become the next point of focus.
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