Ethereum (ETH) has recently experienced a significant downturn, falling below the critical support level of $4,000, which has raised concerns among investors about a potential long-term bearish trend. This break from the support level follows a period during which the price had successfully held above it, only to dramatically decline and signal a potential trend reversal.
This sharp decline comes on the heels of a major security breach within Ethereum’s Decentralized Finance (DeFi) protocol, resulting in over $70 million being lost. Such negative news aligns with the recent price actions, suggesting Ethereum may be entering a prolonged corrective phase that could extend well into the future.
Since reaching an all-time high of $4,955 in August, Ethereum’s price has gradually declined. Initially, the downward trend seemed manageable as it hovered above the $4,000 mark. However, the situation changed significantly on October 10, when the price plummeted to a low of $3,436 before recovering slightly, causing a long lower wick on the chart. Although this bounce could be interpreted as a bullish sign, it also served as a warning that bearish momentum was increasing.
Recent trading patterns indicate further concerns. Ethereum has now dropped below its ascending support trendline, established since April 2025. A sustained close beneath this line would confirm a bearish trend reversal, potentially leading to even lower price points. Momentum indicators further substantiate this trend; the Relative Strength Index (RSI) is currently declining below the neutral 50 level, while the Moving Average Convergence/Divergence (MACD) has also made a bearish cross, all pointing towards continued downward movement.
Forecasts for Ethereum remain grim, with wave analysis suggesting a completed A-B-C structure that has been in play since June 2022. If accurate, this could mean that the upward price movement since that time has now been fully corrected. The alignment of waves A and C indicates robust bearish sentiment, leading analysts to believe that Ethereum’s price may eventually plummet to its 2022 lows around $900, creating a running flat correction.
In the near term, there is a faint glimmer of hope for bulls. A recent breakdown from a symmetrical triangle formation suggests that if the movement aligns with wave B, it could signify a corrective decline rather than a full-fledged bear market. However, this short-term positivity is overshadowed by persistent bearish trends evident in various technical indicators.
Overall, the outlook for Ethereum appears bleak, with multiple factors indicating a continued bearish trajectory. Unless the cryptocurrency can rally back above the $4,000 mark quickly, it risks further declines toward the 2022 lows. While minor recoveries may occur, the prevailing market structure suggests Ethereum’s correction has only just begun, leaving investors cautious as they navigate this turbulent phase.
As always, investors are reminded that all financial decisions carry risks, and it’s advisable to consult with financial advisors before making any significant moves in the market.
