Key takeaways:

• Ether strengthened near $4,000 as a lack of futures demand and tender ETF flows suggested an absence of a bullish trend.

• Falling fees and Ethereum network activity suggest lower onchain demand.

• Analysts have warned of a drop to $3,500 if the $4,000 support is not regained soon.

Ether (ETH) has been hovering around $4,000 for the past two weeks, a period of consolidation after a edged drop below $3,500 on October 11.

Ether traders are currently assessing the likelihood of a further uptrend after the US Federal Reserve confirmed a 0.25% interest rate cut and an end to quantitative tightening.

Ether prices lack sustained bullish sentiment

Ether futures are currently trading at a 5% premium to standard ETH spot markets, reflecting low demand from leveraged buyers.

Related: Early Ethereum Whales Mixing Up? The data shows that the venerable Aether is moving

In neutral market conditions, futures premiums typically range from 5% to 10% to account for the longer settlement period. More worryingly, even the recent rebound to $4,250 has failed to restore sustained bullish sentiment among traders.

The bearish trend in Ether futures coincided with the outflow from US Ethereum spot funds (ETFs), which have dominated since mid-October.

The $380 million ETF net inflow on Monday and Tuesday did little to generate bullish momentum, leaving traders questioning whether the $10,000 ETH price target remains realistic this cycle.

Ether’s inability to stay above $4,000 can also be attributed to the decline in Ethereum network fees, although this problem has affected the entire cryptocurrency market.

Ethereum on-chain fees totaled $5 million over the past seven days, down 16% from the previous week. By comparison, BNB Chain fees dropped 30% and Tron saw a 16% drop. The number of lively addresses in Ethereum’s base layer dropped by 4% over the same period, while Tron saw an escalate of over 100%.

“Classic bear trap” or is the ETH price falling?

Data from Cointelegraph Markets Pro i TradingView show that the ether price prints a third consecutive red candle on the daily chart.

Several recovery attempts have been rejected at the $4,000 resistance level, prompting traders to wonder whether Ether’s mighty run is over or if the altcoin is undergoing a technical correction.

“$ETH Loses $4,000 Support Level Again” he said analyst Ted Pillows in Thursday’s X post.

Pillows pointed out that despite “the Fed cutting interest rates by 0.25%, the end of QT in a month, and trade talks between the U.S. and China,” all of which occurred in the last 24 hours, Ethereum remains in the red.

The attached chart shows that the next line of defense for ETH was $3,800, and its loss would trigger another sell-off, first towards the demand zone at $3,500-3,700 and later to the low of $3,354 reached on August 3.

On the other hand, a recovery of $4,000 would encourage bulls to focus on the $4,200 and $4,500 barriers before returning to all-time highs above $5,000.

Ted Pillows wrote:

“Either this is a classic bear trap or the cryptocurrency market is falling significantly.”

Fellow FibonacciTrading analyst he said “a drop towards $3,300 will still count as a strong pullback from the uptrend held by the EMA cloud,” as shown in the weekly chart below.

“It will be a real show of strength if the bulls manage to defend the support here and prepare for another attack on the resistance.”

For the pseudonymous Cactus analyst, Ether’s winning streak remains on track with a “strong fourth quarter still anticipated” as long as bulls maintain the $3,800-$4,200 support area.

As Cointelegraph reports, bulls need to push the price above the 50-day basic moving average at $4,200 to signal strength and confirm the beginning of the next stage of an up move.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.