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Ethereum Faces $3,850 Test: Downward Pressure Meets Crucial Support Level

Ethereum Faces $3,850 Test: Downward Pressure Meets Crucial Support Level

Bitget-RWA2025/09/26 09:05
By:Coin World

- Ethereum trades near $3,850 with RSI in oversold territory, signaling potential rebound or consolidation amid bearish perpetual funding rates and 22% pullback from August highs. - ETF outflows ($250M since August) and mixed on-chain activity highlight institutional caution, while mid-sized holders accumulate ETH despite minimal corporate treasury activity. - Macro risks including 76% U.S. shutdown odds, Trump tariffs, and Fed rate cuts amplify volatility, though Ethereum's $524B cap remains supported by

Ethereum Faces $3,850 Test: Downward Pressure Meets Crucial Support Level image 0

Ethereum’s market performance in late September 2025 has become a focal point for both analysts and traders, as a mix of technical signals and broader economic trends come into play. The digital asset, hovering around $3,850, has seen its Relative Strength Index (RSI) fall into oversold levels, hinting at a possible bounce or sideways movement. At the same time, negative perpetual funding rates—often a sign of bearish market sentiment—have surfaced, with short positions dominating the derivatives space. Alongside a 22% decline from its August peak, these factors have sparked debate over whether $3,850 could serve as a crucial support threshold Ethereum Price Analysis: Navigating Volatility and Key Levels in September 2025 [ 1 ] Bitcoin, Ethereum Slip As Risks Of US Shutdown Loom [ 6 ].

From a technical perspective, Ethereum appears exposed to further downside. The RSI, now close to 35 on the 4-hour timeframe, points to a potential short-term reversal, yet the MACD remains negative at 151.0. The $4,200 and $3,850 support levels have faced repeated tests; a drop below $4,200 could open the door to losses down to $4,000. On the other hand, a steady climb above $4,300 might reignite bullish sentiment, with targets set at $4,500–$4,700. Analyst Ted Pillows identifies $3,822 as a key pivot, warning that a breach could expose the market to the $3,700–$3,750 range Ethereum Price Analysis: Navigating Volatility and Key Levels in September 2025 [ 1 ] Bitcoin, Ethereum Slip As Risks Of US Shutdown Loom [ 6 ].

On the fundamentals side, the picture is complex. Since late August, Ethereum spot ETFs have seen over $250 million in withdrawals, indicating a cautious stance among institutional investors. Meanwhile, blockchain data shows that mid-tier holders (10,000–100,000 ETH) are accumulating more coins, hinting at changing ownership patterns. Corporate treasuries, however, remain largely inactive, with only BitMine Immersion recently acquiring 264,000 ETH. This contrast between retail and institutional behavior sends mixed signals to the market Bitcoin, Ethereum Slip As Risks Of US Shutdown Loom [ 6 ].

Broader economic factors are adding to Ethereum’s price swings. The probability of a U.S. government shutdown has climbed to 76% on betting markets, and geopolitical developments—such as new tariffs from Trump—are fueling uncertainty. Additionally, the Federal Reserve’s expected rate cut on September 18 and persistent inflation at 3.1% are dampening risk appetite. Analyst Michael van de Poppe suggests that Ethereum’s technical setup and institutional outflows may indicate a bottoming phase, though macroeconomic risks remain significant Ethereum (ETH) Price: 22% Pullback to Key Support Sparks Buy the Dip Calls [ 4 ] Bitcoin, Ethereum Slip As Risks Of US Shutdown Loom [ 6 ].

Despite short-term headwinds, Ethereum’s long-term outlook is still strong. Its $524 billion market cap is underpinned by the expansion of DeFi, the adoption of layer-2 scaling solutions (such as

, Optimism), and growing institutional interest in staking. Even with recent outflows, the introduction of the first Ether staking ETF in July 2025 marked a significant milestone, further establishing Ethereum as a major asset class. Experts note that while the $3,850 mark may attract buyers, a lasting recovery will depend on renewed ETF inflows and more stable macroeconomic conditions Is It Too Late To Buy Ethereum For Gains In 2025? [ 2 ].

The next few weeks are set to be crucial. If

manages to maintain support at $3,850 and break above $4,300 with strong trading volume, a rally toward $4,500–$4,700 could materialize. However, a fall below $3,850 may trigger further declines toward $3,700 or lower. Traders should keep an eye on the Fed’s September 18 meeting, inflation data, and Ethereum’s on-chain activity for guidance. While September has historically been a challenging month for crypto, Ethereum’s robust ecosystem could help counteract bearish trends Ethereum Price Analysis: Navigating Volatility and Key Levels in September 2025 [ 1 ] Bitcoin, Ethereum Slip As Risks Of US Shutdown Loom [ 6 ].

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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