Ethereum Drops Below $3,600: Market Analysis and Recovery Prospects
Ethereum has broken below $3,400, turning negative year-to-date after starting 2025 near $3,353. The sharp decline marks a significant shift in market dynamics for the second-largest cryptocurrency. Currently trading below multiple key moving averages, ETH faces resistance in the $3,800-$3,850 range.
The recent price action has caught many investors off guard. In the past 24 hours, Ether dropped 6% to around $3,630, while the broader crypto market lost $100 billion in capitalization. This dramatic sell-off reflects mounting pressure from various market forces converging simultaneously.
Market analysts point to several contributing factors. The Federal Reserve’s recent actions and cautious messaging have contributed to broader risk aversion across markets. Additionally, institutional outflows have accelerated the downward momentum.
Altcoins Experience Similar Downward Pressure
Major altcoins have not been spared from the sell-off. Solana led losses with a 10% slide to below $160, extending its seven-day drop to more than 20%. The Layer-1 blockchain competitor has faced particularly intense selling pressure.
XRP shed 5% in the same period, while BNB lost 6.4% and both DOGE and Cardano’s ADA dropped roughly 6% each. The widespread decline across alternative cryptocurrencies indicates systematic selling rather than isolated asset weakness.
The XRP price plunged 5% to $2.41 following sharp criticism from Solana Foundation executive Vibhu Norby. This development highlights how social sentiment and competitive tensions can amplify price movements during periods of market fragility.
Ethereum Could Test Lower Support Levels
Several analysts have identified potential downside targets if selling pressure persists. One forecast suggests Ethereum could decline to $2,812 by November 2025, with a potential low of $2,615. These projections assume continued bearish momentum without significant positive catalysts.
If ETH breaks below $3,680, the next support could emerge around $3,500, potentially leading to further downside movement. The technical setup remains precarious as sellers maintain control of short-term price action.
However, not all analysts are uniformly bearish. Support can be found around $3,650, and a rebound above $3,850 could lead to short-term recovery toward $3,965 or $4,000. Key resistance levels will determine whether bulls can regain control.
Institutional Activity Signals Mixed Sentiment
Institutional behavior provides important clues about future direction. Notable actions include $122.7 million net outflows from exchanges and $129 million outflows from Ethereum ETFs. These movements suggest diminished institutional demand in the short term.
Despite price declines, network fundamentals remain strong. Despite the price drop, transactions surged to 1.7 million daily, indicating consistent Ethereum network usage. This resilience suggests underlying confidence among developers and users.
Institutional holdings have exceeded $13 billion, and stablecoin transactions on the Ethereum network reached $2.82 trillion in October 2025. These metrics demonstrate Ethereum’s continued dominance in decentralized finance despite recent price weakness.
Conclusion
Long-term projections remain constructive despite near-term challenges. If the crypto market stabilizes and Layer-2 expansion continues, the ETH price could reach around $4,600 by late 2025. This scenario depends on broader market stabilization and continued ecosystem development.
Technical upgrades provide reasons for optimism. The upcoming Fusaka upgrade is tentatively scheduled for November 2025, featuring PeerDAS with 8x data blob capacity and gas limit caps. These improvements could enhance network efficiency and attract renewed investor interest.
Analysts are watching for a potential break above $5,200 as the next key milestone if current macro and adoption trends continue. The path to recovery will require clearing multiple resistance levels and rebuilding positive sentiment.
