ETH/USD Weekly Chart (Bitstamp) – Source: TradingView

The first thing is a double-top pattern at $4,000 that immediately resulted in a huge decline for the token. This setup was confirmed by a drop in the Relative Strength Index (RSI) below its 14-week moving average, which is typically interpreted as a sign of a trend reversal.

ETH broke two trend line supports this year as well, the first in February and the other in late October. The first time, ETH went on to 1,400.

The market’s structure is also bearish in this higher time frame as ETH dropped below its structural support. We are now seeing the first strong bounce, which marks ETH’s first lower low.

Now, we could be heading to retest the $3,900 level from below to confirm the market’s bearish bias. Traders should pay attention to how the price action unfolds in 2026 if the price gets there at some point.

If the market rejects a move above this line, the odds of a much stronger drop toward $2,500 or lower will be high. The only way that ETH’s outlook would be bullish from now on is if we break the $4,000 barrier again.

That would invalidate the bearish structure and ignite the token’s next leg up, possibly eyeing the $5,000 level this time.

Another interesting confirmation of a bearish bias for 2026 is a break below the 100-week exponential moving average (EMA). This is the fifth time this has happened since 2022. In two out of the four previous instances, the price of ETH dropped by more than 37%.

So, we have a 50% chance that ETH could drop to at least $1,650. For that to happen, some strong catalysts would be needed. We don’t have the negative catalysts that can drive the top altcoin to those lows on the table right now.

Meanwhile, heading to the daily chart, we can see that there are early signs of a reversal. This favors the view that ETH could be getting ready to climb back to $3,900 in the mid-term if positive momentum gains traction.

Favoring this thesis, the Federal Reserve just cut interest rates for a third time this year, clearing the fog and improving the market’s visibility for months to come.