Ethereum Battles Key Resistance at $3,400 as Technical Indicators Signal Critical Juncture

Ethereum (ETH) is trading near the $3,250 mark, having faced significant rejection at the $3,350-$3,400 resistance zone. This critical area encompasses the 200-day moving average and a key horizontal resistance level that has repeatedly capped upside attempts since late November. Despite the recent pullback from a high near $3,326, ETH has maintained its position above the higher lows established in November and is holding just above a descending trendline it recently broke.

Analysts are closely watching the $3,190-$3,200 level as a pivotal support. TradingView analyst Bahardiba notes that holding above $3,190 could propel ETH towards $3,450 and eventually the $3,700-$3,800 resistance range. Conversely, a break below this level could open the door for a retest of the $3,000-$3,036 support zone.

A bearish technical pattern, known as an Evening Doji Star, has emerged on the daily chart. Analyst Ali (@alicharts) highlights this three-candle formation near major resistance as a potential warning sign of waning bullish momentum. Historically, similar patterns have preceded short-term retracements of 6-12% for Ethereum.

On-chain data presents a mixed picture. CryptoQuant analyst Maartunn points out that Net Taker Volume remains negative at -$138 million, although this is a significant improvement from October's -$500 million. There are also early signs of recovery in demand, with Glassnode reporting modest inflows into ETH spot ETFs after a period of sustained outflows, suggesting some investors are positioning for a potential year-end rally.

The broader market context remains crucial. Analyst CryptoWZRD notes that ETH's recent 47% pullback closely mirrors a mid-2024 correction that was followed by a strong rally. However, for a sustained ETH recovery, a decline in Bitcoin Dominance (BTC.D) is needed to fuel further upside for the ETH/BTC pair, which has recently shown weakness.