Ethereum (ETH) is finding it increasingly difficult to reclaim the $4,500 level, with weakening demand across spot markets, exchange-traded funds (ETFs), and derivatives signaling a lack of fresh buying momentum. At press time, Ether trades near $4,363, facing the risk of a deeper correction that could push prices toward $3,550.
Buyers Step Back as Spot Demand Weakens
ETH has been locked in a downward trend since peaking at an all-time high of $4,950 on Aug. 14, forming a pattern of lower highs and lower lows on the daily chart. The once-strong $4,500 support has flipped into resistance, holding back the asset for more than 10 consecutive days.
Data from Glassnode’s spot volume delta metric shows negative net spot buying on exchanges, indicating sellers continue to outweigh buyers. Without fresh demand, analysts warn that any breakout attempts could fail, leaving Ethereum vulnerable to consolidation or further downside.
The problem extends to institutional products as well. Spot Ethereum ETFs recorded $787.6 million in outflows last week, according to SoSoValue, with Friday alone seeing redemptions of nearly $447 million. This retreat underscores waning confidence among professional investors, further limiting ETH’s upward momentum.
Derivatives and Network Metrics Add to Bearish Pressure
Leverage demand is also cooling. Ether futures open interest has fallen 18% from its Aug. 23 peak of $70 billion to $58 billion, suggesting reduced speculative activity. Historically, such drops in open interest have coincided with significant price declines, between late July and early August, a similar drop in OI accompanied a 15% ETH correction.
On-chain activity paints a similar picture. Ethereum’s network revenue fell 44% in August, dropping from $25.6 million in July to $14.1 million, despite ETH’s explosive 240% rally since April. Transaction fees are also down about 10% over the past month. Analysts attribute much of this decline to the Dencun upgrade, which reduced costs for layer-2 networks but simultaneously weakened Ethereum’s fee-burning, deflationary mechanism.
Technicals Point to $3,550 Target
From a charting perspective, Ethereum is forming a descending triangle pattern on the daily timeframe, often seen as a bearish reversal signal. A confirmed break below $4,200 support could pave the way for an 18% slide, placing the next major target near $3,550.
Still, not all outlooks are bearish. Some traders, including investor Ted Pillows, note that ETH remains “strong above $4,200,” suggesting that a dip to $3,800–$3,900 could provide a healthy retest before resuming higher. Other analysts highlight $3,745 as a potential rebound zone if ETH loses current support.
Ethereum’s struggle to clear $4,500 resistance reflects a combination of weak demand, falling institutional participation, and declining network activity. While the long-term trend remains intact, the short-term setup suggests that without a return of strong buyer interest, ETH could face another leg down toward the $3,500 zone before bulls regain control.
