#ETHTrendWatch

ETH price is stuck between two trend lines.
Ether (ETH) has been fluctuating around $3,000 for the past three weeks, following a sharp drop to $2,620 on November 21st. Ether investors are questioning the possibility of a further correction if the $2,800 support is lost.
Ether has fallen back below $3,000 due to a lack of demand for futures and aggressive selling by long-term holders.
Decreased Ethereum network fees and activity point to weaker on-chain demand.
Weak technical setups warn of a drop to $2,300 should the next support be lost.
Ether's recent recovery was reversed by resistance formed by the 50-day exponential moving average (EMA), currently at $3,260, as seen in the daily chart below.
Nevertheless, ETHUSD found support in the demand zone between $2,800 and $2,600. The 200-week EMA is currently located within this region.
For ETH to break out of the consolidation and sustain a recovery towards $4,000, it needs to break above the $3,000 resistance and surpass the 50-day EMA.
On the downside, the key support area is around $2,800, where 5.8 million ETH was previously purchased.
Ether price has weak upward momentum
Ether futures are trading at a 3% premium compared to bearish ETH spot markets. This reflects reduced demand from leveraged buyers.
In bearish market conditions, futures premiums typically remain below 5%. This indicates weak demand for leveraged long positions and lower optimism among investors.
Even more concerning is that last week's recovery to $3,750 failed to create sustained bullish sentiment among investors.
The downward trend in Ether futures coincided with a decrease in the long-term supply. Over the past 30 days, the long-term supply decreased by 847,222 coins, the largest drop since January 2021. This is increasing selling pressure, preventing ETH from staying above $3,000.
Another reason Ether is failing to stay above $3,000 is the decrease in Ethereum network fees. However, this issue has affected the entire cryptocurrency market.
Ethereum chain fees totaled $15.1 million over the past 30 days, a 45% decrease compared to the previous month. For comparison, fees on BNB fell by 56%, while Tron experienced a 15% decline.
Although the number of active addresses on Ethereum's base layer increased by 3.5% during the same period, it decreased by 14% in the last seven days. Transaction volume also fell by 11% over the seven-day period.
Ether bears target $2,300
The ETHUSD pair confirmed a bearish flag on the daily chart after falling below the lower limit of $3,200.
Ether is consolidating after a sharp sell-off and forming a bearish flag below the previous support in the 3,173 to 3,250 region.
This area has now turned into resistance. The measured target of the flag is at the $2,300 level, representing a 22% drop from the current price.
Looking closely at the 12-hour timeframe, a break below the lower trendline of the megaphone formation at $2,800 and a close below this level could open the door to a deeper correction towards the formation's measured target at $2,376.
Such a move would represent an 18% drop from the current price.
If this support is lost and bears manage to push the price below $2,800, the ETH price could retreat to the next support zone between $2,716 and $2,623.