Bearish Signal Emerges For Ethereum As US Spot Demand Fades

Ethereum has once again failed to hold above a critical resistance zone, retracing from the $3,300 level back toward the $3,100 area. The pullback highlights the market’s ongoing struggle to establish a sustainable recovery, as bullish momentum continues to fade near key technical thresholds. While buyers have managed to prevent a deeper correction for now, the inability to reclaim higher levels has reinforced a cautious tone across the market.

Beyond price action, on-chain data adds an important layer to this weakness. According to data from CryptoQuant, Ethereum’s Coinbase Premium Gap has dropped sharply into negative territory. This metric, often used as a proxy for US institutional demand, reflects the price difference between Coinbase and offshore exchanges. A negative reading suggests that buying interest from US-based investors is lagging behind global activity, reducing the probability of a strong upside continuation.

Historically, sustained Ethereum rallies have coincided with a positive Coinbase Premium, signaling consistent institutional accumulation. The current divergence between price attempts to stabilize and weakening US demand creates a structural headwind for bulls. As long as this premium remains negative, reclaiming the $3,300 level becomes increasingly difficult.

For now, Ethereum appears trapped in a fragile range, where price stability depends less on aggressive buying and more on the absence of renewed selling pressure. The coming sessions will be decisive in determining whether this consolidation evolves into a recovery or resolves to the downside.

Coinbase Premium Weakness Undermines Recovery Attempt

A new on-chain signal is reinforcing the cautious outlook for Ethereum as it trades below key resistance. Analysis shared by CryptoQuant and highlighted by CryptoOnchain shows that the Coinbase Premium Gap has deteriorated sharply, reaching its most negative level in nearly a year. The 14-day moving average of the metric has fallen to around -2.3, indicating that ETH prices on Coinbase are trading at a notable discount compared to Binance.

This divergence matters because Coinbase activity is often used as a proxy for US institutional demand. When the premium turns deeply negative, it typically signals that buyers in the US spot market are either stepping aside or actively distributing rather than accumulating. That dynamic is unfolding as Ethereum remains capped below the $3,300 resistance zone, following its sharp correction from the October peak near $4,700.

The combination of weak price follow-through and declining Coinbase demand creates a bearish divergence. While ETH attempts to stabilize, the lack of institutional participation reduces the probability of a sustained breakout. Historically, strong Ethereum rallies have required a positive Coinbase Premium, reflecting consistent inflows from US-based investors.

Until this gap narrows and flips back into positive territory, Ethereum’s upside appears constrained. For now, the data suggests caution is warranted, as the persistence of weak US demand increases the risk that recent consolidation resolves into another leg lower rather than a confirmed recovery.

Ethereum Struggles As Recovery Lacks Confirmation

Ethereum’s price action remains fragile after failing to reclaim the $3,300 resistance zone. On the daily chart, ETH is trading near the $3,100–$3,150 area, a level that has acted as a short-term pivot but has not yet attracted strong follow-through from buyers. The broader structure still reflects a corrective phase rather than a confirmed trend reversal.

From a technical perspective, ETH remains below its key moving averages. The 50-day moving average is sloping downward and continues to cap upside attempts, while the 100-day and 200-day moving averages sit higher, reinforcing a heavy overhead supply zone between roughly $3,300 and $3,600. Each rally into this region over recent weeks has been met with renewed selling pressure, highlighting persistent distribution.

The sequence of lower highs since the October peak near $4,700 remains intact. Although price has stabilized compared to the sharp November sell-off, the rebound so far resembles consolidation within a bearish structure rather than a new impulsive move. Volume has also moderated during recent advances, suggesting limited conviction behind the bounce.

On the downside, the $2,900–$3,000 range stands out as a critical support area. A sustained break below this zone would expose Ethereum to a deeper retracement toward the mid-$2,600s. For bullish momentum to regain credibility, ETH must reclaim $3,300 with strength and hold above the declining moving averages. Until then, the chart argues for caution, with downside risks still present despite short-term stabilization.

Featured image from ChatGPT, chart from TradingView.com