• Ethereum shows long-term strength despite a short-term pullback.
• Over 33 million ETH are locked in staking, signaling reduced supply.
• Price consolidation between $3,565 and $4,000 could define the next trend.

Ethereum is showing signs of resilience despite a brief market correction. According to OnchainHQ’s Head of Research, Leon Waidmann, Ethereum’s fundamentals remain firm even as its price appears weak.

The network’s total value locked (TVL) has surged to $379 billion, marking a 16x increase since 2020. This expansion in ecosystem value historically acts as a foundation for ETH’s price stability.

The steady rise in liquidity, lending, and staking participation indicates that the downside potential may now be limited.

At the time of writing, Ethereum trades at $3,664.86, reflecting a 6.2% decline for the week. The latest weekly candle closed at $3,664.97 after opening at $3,907.91 and hitting a low of $3,565.23.

Despite the decline, ETH remains well above its 50-, 100-, and 200-week simple moving averages, suggesting the long-term trend is still upward. The price, however, sits below the 20-week SMA at around $3,900, highlighting a short-term resistance zone.

Also Read: Ethereum Emerges as Main Capital Hub After ZKsync Atlas Brings 15K TPS and Instant Finality

Market Signals Suggest Pause Before Next Move

Momentum indicators paint a mixed picture. The Relative Strength Index (RSI) stands near 49.7, showing neutral momentum, while the Money Flow Index (MFI) at 52 suggests balanced inflows and outflows.

The Awesome Oscillator remains positive but is showing declining green bars, signaling a temporary slowdown in bullish momentum.

The weekly candle’s lower wick near $3,565 suggests strong buying activity at that level. If this support holds, it may mark the base for the next upward push.

Immediate resistance lies at $3,900 and the psychological $4,000 level. A decisive close above this range could pave the way for renewed bullish momentum.

Should ETH fail to maintain support at $3,565, it could revisit the $3,150–$3,200 range, aligning with the 50-week SMA. 

The 200-week SMA near $2,450 remains the long-term safety net, indicating where deeper buyers may reappear if broader market sentiment weakens.

Ethereum Supply Reaches Multi-Year Lows

Another factor shaping Ethereum’s outlook is its tightening supply. Money Ape highlighted that exchange reserves are at multi-year lows, while over 33 million ETH are now staked.

Combined with the EIP-1559 burn mechanism continuously reducing circulating supply, Ethereum’s availability on the open market keeps shrinking.

With the upcoming spot ETH ETFs and institutional interest building, demand is expected to rise while supply continues to decline. This dynamic could set the stage for Ethereum’s next major upward movement once the current consolidation ends.

Also Read: Ethereum Stablecoins Hit $183.2 Billion, Surpassing Major Global Reserves