Ethereum (ETH) fell sharply after failing to hold above the $3,400 resistance level. This move pushed the price below the key support line, resulting in increased selling in both local and derivative markets.
As of press time, ETH is trading arpimd at $2,960, down nearly 12% over the past week. Commercial activity has grown, but consumers seem to be pulling back.
Rejection at $3,400 Causes Sale
Ethereum was stopped near $3,400, the level traders were watching. Analyst Kamran Asghar said the rejection came “completely outside the OTE sales area,” referring to an area often targeted by salespeople.” After that move, the price hit an ascending support, putting the $2,600 area back in focus.
$ Ethereum Denied and Dismissed.
It performed well at the OTE dealership for $3,400. We have now found rising support, and the path of least resistance looks like a trip back to the $2,600 price area. pic.twitter.com/6JQuZIqpmY
— 𝐊__𝐦𝐫𝐫𝐧 𝐀𝐬𝐫𝐡𝐫𝐫 (@Karman_1s) January 21, 2026
In the previous day, Ethereum lost about 5% while the volume increased to more than 31 billion dollars. Derivatives volume also increased by 40%, reaching $71.75 billion, according to CoinGlass data. But open interest fell about 5% to $39.35 billion, indicating that many traders were closing positions rather than adding risk.
Meanwhile, heatmap data from the order books shows heavy buying interest sitting below the current price. Analyst Kriptoholder noted demand at $2,800–$2,850, with major buying walls around $2,500–$2,600.
These areas may attract buyers if the property declines further. Pointing to huge pending orders from major players, Kriptoholder said,
“The heatmap of the order book clearly reveals the depth of real liquidity beneath the price action.”
ETF Outflows and Falling Exchange Reserves
ETH US ETHs recorded a total outflow of $229.95 million on January 20, ending a five-day inflow streak (according to SoSoValue data). The change in the direction of the flow came at the same time as the price decline, suggesting possible profit taking or a reduction in short-term confidence.
Meanwhile, the ETH held in the central exchange continues to decrease. According to the analyst of CryptoQuant Arab Chain, reserves decreased to 16.2 million ETH, which is the lowest since 2016. Binance alone saw a fall from 4.168 million to 4.0 million tokens since the beginning of January.
In addition, Ethereum staking also hit a new record, with more coins staking than ever before. This reduces circulating supply and may support the price once selling pressure fades.
The Long Term Setup is Always Focused
Some vendors are looking for a larger setup to play. As CryptoPotato report, ETH may form an inverse head and shoulders pattern, with a potential target of breaking near $4,400. That level will need to be cleared for the framework to be validated.
Elsewhere, a post from Bitcoinsensus raised this question: “Is $10K ETH on the table this cycle?” Based on past cycles and reduced returns, the estimate suggested a potential range of $10K–$15K. However, market conditions remain fluid, and the near-term trend is down.
The post ETH Crashes 12% Weekly: Is a Drop to $2,600 Next? appeared first on CryptoPotato.
