Ethereum (ETH) has recently surged by 22.5%, reaching $3,444.25, its highest level since July 2024. However, the cryptocurrency experienced a brief 6.37% decline after reaching this peak. Despite this short-term dip, Ethereum’s overall bullish structure remains strong. Key support levels, growing institutional interest, and healthy on-chain metrics suggest that ETH could soon resume its upward momentum.

Institutional Investors Continue to Buy Ethereum

One of the key factors supporting Ethereum’s long-term bullish outlook is the continued interest from institutional investors. Over the past five consecutive days, spot Ethereum exchange-traded funds (ETFs) have seen significant net inflows. According to Coinglass, a total of 213,570 ETH was acquired during this period, signaling strong institutional confidence in the cryptocurrency. This consistent buying pressure indicates that traditional investors are undeterred by recent price fluctuations and remain committed to Ethereum’s future growth.

Institutional investors are typically focused on the long-term potential of assets, and their ongoing participation in Ethereum suggests that the recent pullback may be viewed as a temporary market correction rather than a sign of any broader bearish trend.

Derivative Traders Show Caution Amid Price Decline

While institutional investors remain bullish, derivative traders have shown signs of caution. The recent price dip led to a substantial increase in long liquidations, with over $98.73 million worth of long positions being closed as Ethereum’s price moved against these traders. Liquidations occur when the price of an asset moves against the positions that traders have bet on, forcing them to sell off their holdings to cover their losses.

Additionally, Ethereum’s growing Exchange Reserve suggests that some traders are moving their ETH onto exchanges, potentially preparing to sell if prices decline further. These bearish signals from derivative traders have contributed to the downward pressure on ETH’s price, but they do not necessarily signal a change in the broader market trend.

Key Support Levels: A Minor Dip Before the Next Rally

Despite the short-term decline, Ethereum’s overall bullish market structure remains intact. Technically, Ethereum is still in an upward trend, and the recent pullback is seen by many analysts as a healthy market correction. Ethereum’s price is now hovering near key support levels between $3,079.89 and $3,015.91. These levels are critical, as they represent a demand zone where buying pressure is expected to emerge.

If Ethereum’s price falls into this range, it could attract fresh buying interest from investors looking to enter at lower price points, fueling a potential rebound. If this support holds, Ethereum could quickly resume its upward movement, with analysts targeting a rise to $3,972.01 — a critical resistance level.

Worst-Case Scenario: A Deeper Pullback to $2,725

While the market remains largely bullish, Ethereum could face further declines if the broader market sentiment turns more negative. If Ethereum fails to find support in the $3,079–$3,015 range, it could dip further, potentially testing the $2,725.04 level. This area is another key support zone that has historically attracted buying interest. Should ETH reach this price point, it could trigger a renewed bullish surge.

A dip to $2,725 could provide an even stronger entry point for long-term investors, especially if they believe in Ethereum’s future potential as the market stabilizes and recovers.

Ethereum’s Long-Term Outlook Remains Strong

Despite the short-term pullback, Ethereum’s long-term bullish outlook remains strong. The sustained interest from institutional investors, the potential for a recovery at key support levels, and Ethereum’s healthy on-chain metrics all point to a continuation of its upward trend in the medium to long term.

As Ethereum navigates this brief market correction, traders will be closely watching the $3,079–$3,015 support zone to gauge whether buying pressure will resume. If Ethereum can hold above these levels, it is likely to continue its rise toward new highs, with the $3,972 resistance level as the next major target.