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Ethereum’s Drop Below $4K Raises Bearish Concerns as ETF Outlook Remains Unclear

Ethereum’s Drop Below $4K Raises Bearish Concerns as ETF Outlook Remains Unclear

Bitget-RWA2025/09/25 15:38
By:Coin World

- Ethereum’s price fell below $4,000 for the first time in months, signaling a significant correction amid broader market volatility. - Technical indicators like MACD (-0.077) and RSI (59.61) suggest weakening momentum, while whale activity and a Solana scam worsen retail sentiment. - Institutional activity is mixed: DeFi Development Corp added $2.7M, but VanEck’s Ethereum ETF faces regulatory delays, lowering approval odds. - Market focus remains on key support levels ($200.97, $174.40), with ETF uncertai

Ethereum’s Drop Below $4K Raises Bearish Concerns as ETF Outlook Remains Unclear image 0

Ethereum’s value slipped under $4,000 for the first time in several months, signaling a notable pullback as market volatility intensified. CoinMarketCap’s data shows Ethereum dropped 0.9% over 24 hours, lagging behind the wider crypto market’s -1.18% decline. This downturn highlights increased selling activity, with traders responding to both technical resistance and broader economic uncertainty. The important $4,000 psychological level was lost as

was unable to maintain momentum above the 23.6% Fibonacci retracement ($207.42) and the crucial $217.84 swing high. This fall has sparked worries about short-term strength, as analysts point to a softening MACD histogram (-0.077) and a drop in the RSI to 59.61, indicating a period of consolidation after recent overbought signals.

The price drop occurred alongside a spike in whale transactions, with major holders transferring $17.45 million worth of Ethereum to exchanges—a move often associated with profit-taking. This follows a 31% rally over the past two months, with similar activity preceding a 12% correction in July. The current decline has also been worsened by a $185,000 scam targeting

wallets, which, while not directly related to Ethereum, has negatively impacted overall retail sentiment. Institutional involvement is mixed: DeFi Development Corp acquired $2.7 million in Ethereum this week, but VanEck’s Ethereum ETF is still facing regulatory holdups, with analysts giving it a 35% or lower chance of approval.

Technical signals indicate that Ethereum could face more losses if it fails to recover key support levels. Attention is now on the 38.2% Fibonacci retracement at $200.97; a drop below this could lead to a sharper decline toward $174.40 (the 200-day EMA). On-chain data reveals $2.5 billion in stablecoin outflows from Ethereum DeFi since July, though some of this has been balanced by institutional buying. Experts warn that a daily close above $212.27 could negate the bearish outlook, but current trends suggest ongoing downward pressure.

In the broader market, altcoin season indicators have surged, with the altcoin index climbing 66% this month. Ethereum’s position as both an AI narrative asset and a target for institutional adoption has been strengthened by network upgrades, including the finalized Alpenglow consensus update aimed at 150ms transaction finality. Nevertheless, uncertainty around ETFs remains, as VanEck’s spot product continues to face SEC delays. This stands in contrast to Bitcoin’s ETF progress, where regulatory clarity has encouraged institutional investment. For Ethereum, the lack of a definitive regulatory path for spot ETFs continues to weigh on investor sentiment.

Traders are watching closely to see if Ethereum can hold above the 20-day EMA ($206.51). If the price fails to stay above this level, a retest of the $200 psychological support is likely, with further downside possible to $186.94 if bearish trends continue. On the other hand, a move back above $215 would indicate renewed bullish momentum and could set up a challenge of the $220 resistance. While institutional interest—including from corporate treasuries and staking ETFs—remains a positive long-term factor, short-term price swings are expected to continue amid economic uncertainty and unclear regulations.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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