Ethereum’s price is being driven by fear and greed; analysts warn of a cycle heavy on leverage
When people use leverage, trade based on feeling, or worry about security, the price of Ethereum (ETH) keeps going up and down quickly. Even though it sometimes goes up, analysts say the world’s second-largest coin is still stuck in a loop of fear and greed. This might last until there is real interest on the spot.
Leverage and sentiment drive volatility
Data from Santiment and CoinGlass shows that Ethereum’s recent trading has been influenced by big changes in funding rates, which have created a trend of local highs and lows that can be predicted. As prices dropped from $4,900 to $4,500 in early September, ETH’s total funding rate went negative. This caused a wave of long liquidations..By September 12, Ethereum rebounded 11.5% to $4,700, only to see short sellers squeezed out — sending funding rates sharply positive again. The cycle repeated in late October when ETH fell to $3,800, wiping out $954 million in long positions.
“”These changes in funding rates are making people trade on emotion and for the short term,” Lead Analyst at CEX.IO Illia Otychenko told Decrypt. “Traders are responding to each other’s leverage instead of real demand to buy or sell, which makes the market less stable.”
Otychenko added that Ethereum’s derivatives market now shows rising open interest despite declining prices — a classic indicator that leverage is sustaining the market rather than true spot demand.
Funding Resets Needed for a Breakout
For Ethereum to escape its range-bound trading pattern, Otychenko says a reset in derivatives positioning and a surge in spot buying are critical. Until then, ETH is likely to remain volatile, with a bearish bias. He also said that traders who try to “buy the dip” could lose even more if the market’s trend doesn’t change.
Even with these worries, the long-term picture is still positive. Analysts think that the macroeconomy will be in better shape, especially as the Federal Reserve’s easing cycle goes on. On the prediction market Myriad, people think there is a 61% chance that Ethereum will go up to $4,500 instead of down to $3,100.Hacks and Investor Fear Add Pressure
Adding to the uncertainty, Ethereum recently faced another security scare after a Balancer exploit drained about $128 million in assets from the network. The hack has further dented confidence in Ethereum’s DeFi infrastructure, already under scrutiny from regulators and investors alike.
According to The Motley Fool, Ethereum fell 6.1% in the past 24 hours and is now 25% below its August highs. Despite this, some investors — including BitMine, which recently purchased over 82,000 ETH tokens — remain bullish on the network’s long-term potential.
“Sentiment is dominating Ethereum’s price action right now,” the report stated, noting that panic selling and FOMO-driven buying continue to overshadow fundamental growth metrics
Analyst Views: Ethereum Still the Strongest Ecosystem
Not all analysts are bearish. Popular crypto trader Michaël van de Poppe said on X (formerly Twitter) that Ethereum remains the best ecosystem to invest in, citing its developer activity, expanding product base, and strong network effects.
He noted that ETH is “close to a push toward a new all-time high above $5,000,” contingent on breaking key resistance levels at $3,880 and sustaining momentum above the $3,887.35 session high.
Data from CoinDesk Research showed Ethereum’s intraday path ranged between $3,771 and $3,822, with buyers active early but sellers guarding the upper band. Support currently sits at $3,680–$3,720, while resistance remains strong near $3,860–$3,880.
What’s Next for Ethereum?
The price of Ethereum is now around $3,834, up from a daily low of $3,687 (CoinGecko). Analysts think that the network’s basics are still strong, but prices won’t be stable again until investors become more active and take over the demand side of the market.
Prices are expected to stay the same in the short term, between $3,730 and $3,880. Traders are looking for a clear break above $3,880 to see what the next move up will be.
Key Takeaways
- Ethereum’s price is locked in a greed-and-panic cycle driven by leverage.
Analysts say a derivatives reset and spot demand are essential for a breakout.
A $128M hack and bearish sentiment have weighed on ETH’s short-term outlook.
Long-term investors remain confident in Ethereum’s ecosystem strength.
Key support: $3,680–$3,720; resistance: $3,880–$3,887.
Conclusion
There are still two markets in Ethereum’s history: one is run by short-term players looking for leverage, and the other is run by long-term believers in blockchain innovation. The price of the cryptocurrency may stay unstable until spot buyers take back control, going back and forth between fear and hope. But for people who are betting on Ethereum’s technology, the current drop may still be a chance, not a loss.
