Ethereum Struggles to Regain Strength as Analyst Warn of Weak Recovery Phase

Ethereum’s rebound remains weak as analysts identify the $3,600–$3,700 zone as a decisive range for potential bullish recovery confirmation.

Exchange outflows suggest tightening supply, indicating holders may be moving ETH off exchanges in preparation for longer-term accumulation phases.

A whale’s $70 million ETH purchase highlights renewed big-player interest amid uncertain price structure and ongoing post-crash market correction.

Ethereum’s recent rebound appears weak following this week’s sharp market decline, with analysts cautioning that the move could be short-lived without strong inflows.

Weak Rebound Driven by Short Covering

Ethereum’s short-term recovery is showing limited strength after a week marked by heavy selling pressure. According to market analyst Ted (@TedPillows), the current bounce in Ethereum (ETH) appears corrective rather than a sustained reversal. He notes that the rally is largely supported by short positions being closed, not by genuine buying demand.

Ted’s analysis of the chart shows a minor support zone strong of between $3,280 and $3,300, where the price has found some stability. He does respect that Ethereum must reclaim the resistance zone in dotted line between $3,600–$3,700, with good trading volume, in order to confirm some renewed strength. The structure of the move still reflects weakness, he explains, and this can keep ETH in a still vulnerable recovery phase.

If Ethereum fails to secure a decisive close above that zone, projections suggest possible retests near $3,000 and $2,850, levels aligned with previous demand clusters. These areas could become the next testing points for traders watching for a more stable bottom formation.

Exchange Outflows Hint at Emerging Supply Pressure

Market sentiment is showing contrasting signals as Ethereum reserves on exchanges continue to decline, suggesting a tightening supply. Commentator Mister Crypto highlighted that ETH holdings across major trading platforms are rapidly decreasing, a factor that may potentially lead to a supply crunch in case demand picks up.

Historically, falling exchange balances hint at holders transferring assets to private wallets, usually associated with long-term accumulation. This behavior could reduce the amount of immediate selling pressure and contribute to a more balanced market structure.

Still, analysts warn such on-chain data needs to be complemented by price strength and inflows to confirm a real change in sentiment. Without that confirmation, Ethereum’s price action remains at the mercy of market participants’ interpretation of the continued supply squeeze.

Whale Activity Adds Mixed Market Signals

Amid broader uncertainty, whale accumulation has introduced another layer of complexity. BitBull reported that a large holder recently acquired 21,400 ETH, valued at roughly $70 million, following the market crash. Historical data indicates that this entity has often purchased at lower levels and sold after price recoveries.

This might indicate the renewed buying activity and confidence by high-cap investors, though whether it actually initiates a more general uptrend is yet a question. Whale purchases have the potential of giving prices temporary support, especially when retail participation is weak.

Ethereum’s general recovery is yet to be actualized, especially when it comes to reclaiming key resistance levels and sustained inflows. Until then, the current rally is seen as a corrective phase within a larger downtrend rather than a confirmed shift toward bullish momentum.

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