Ethereum has triggered bearish technical signals after breaking down decisively from a rising wedge pattern near the $3,850 level. This pattern formation, traced back to early July from around $2,400, is typically interpreted as a sign of weakening bullish momentum.
Confirming the potential shift, bearish divergence has developed on the Relative Strength Index (RSI). While the price formed higher highs, the RSI produced lower highs, indicating a reduction in upward strength coinciding with the breakdown.
The $3,150 level now emerges as a critical near-term liquidity zone for ETH. Should selling pressure intensify, this area could trigger significant long position liquidations, potentially accelerating downward momentum.
Should the $3,150 support give way, historical levels suggest the next significant support lies between $2,800 and $2,233, regions previously acting as consolidation and long-term support areas.
Although the Moving Average Convergence Divergence (MACD) indicator currently remains in bullish territory, caution is warranted as its histogram bars are shrinking. This indicates a notable weakening of momentum, lending further weight to the bearish technical outlook.