Ethereum News Today: Ethereum Faces Liquidity Battle: Bulls Hold the Line at $3,100 While Bears Anticipate Further Drops

Ethereum (ETH) traders are monitoring significant liquidity areas as the cryptocurrency struggles to regain strength around $3,100. Analysts remain split on whether the recent decline hints at a possible recovery or signals further downward pressure. Over the past week, ETH has dropped 11%, hovering near $3,100, while overall market sentiment stays cautious

amid decreasing ETF interest and evolving expectations for Federal Reserve policy.

Technical experts have identified a crucial liquidity band between $2,904 and $2,916, which could serve as a "buy zone" for

, as noted by Hyblock Capital. The company pointed out that further liquidity sweeps may be necessary to form a solid foundation, with the next important support area below $3,000 . Altcoin Vector observed that Ethereum’s liquidity profile has "completely reset," a trend often seen before major market bottoms. However, the platform cautioned that rebuilding liquidity typically leads to extended consolidation periods rather than swift recoveries, potentially increasing the risk of further declines.

On the bearish front, TradingView analysts stressed that ETH needs to reclaim the $3,450 level to break its current bearish trend. If it remains below this threshold, they expect sharp but brief drops triggered by stop-loss orders, found between $3,800 and $3,900. Meanwhile, Crypto Patel pointed to a Fair Value Gap (FVG) in the $3,270 to $3,360 range as a possible short-term target, could occur if the current structure remains intact. Analyst Lennaert Snyder agreed, noting that ETH faced rejection at the $3,200 resistance and could test $3,350 if support near $2,990 holds.

Wider market trends are also impacting

. U.S. Ethereum ETFs saw $74 million in outflows on Tuesday, continuing a bearish trend that has brought net assets down to $19.6 billion from $12.88 billion in October . This drop mirrors broader weakness in the crypto sector, as (BTC) ETFs experienced $373 million in outflows, reducing their net assets to $122.29 billion. SoSoValue data indicates that these ETF outflows have shaken investor confidence, for ETH ETFs reaching $12.88 billion since inception.

Major liquidity providers are also acting cautiously. BlackRock led $523 million in Bitcoin ETF outflows in November, and two leading crypto market makers are reportedly facing financial shortfalls, according to Bitmine Immersion's Tom Lee

. On Nansen’s platform, sophisticated traders have added $5.7 million in short positions in the last 24 hours, indicating a tilt toward bearish bets .

Despite the prevailing negative sentiment, there are some positive developments. Ethereum’s Account Abstraction team has unveiled plans to integrate Layer 2 (L2) networks through the Ethereum Improvement Layer (EIL), aiming to simplify cross-chain transactions and minimize bridge-related risks

. This project, which leverages ERC-4337 account abstraction, could enhance user experience and boost adoption, though ETH’s price remains vulnerable. The Relative Strength Index (RSI) for ETH has moved up from oversold levels, but bulls need to protect the $3,100 mark to avoid a drop toward the $2,850 support zone .

The Federal Reserve’s policy direction adds further uncertainty. The market now estimates a 46% probability of a rate cut in December, a sharp decline from 93.7% in October,

. Experts caution that continued liquidity tightening could prolong ETH’s consolidation, with the December FOMC meeting being a critical event to monitor .