Ethereum Faces Sharp Pullback Today: A Square Low Stock Alert Emerges as Key Support Breaks Down

Market Overview: When Technical Breakdowns Trigger Broader Selloffs

Ethereum experienced a notable correction today, marking one of its steepest single-day declines in recent months. The broader crypto market, driven by macroeconomic headwinds and technical weakness, saw widespread pressure across major assets. This creates what traders call a “square low stock alert”—a critical confluence where price action forms geometrically significant support levels that, if broken, could cascade into deeper losses.

The Day’s Price Action: From Support Crumble to Recovery Attempt

The Opening Breakdown

ETH plummeted early this morning, briefly piercing the $4500 support zone and hitting lows near $4496.8 according to market data. By midday, the asset had recovered slightly to $4537, but the damage was done. The 24-hour decline peaked at 5.41% at one point, with readings stabilizing around 3.81% by late afternoon. This represents the sharpest single-day drop since August 1 (which saw a 3.92% decline), effectively erasing three consecutive days of gains.

Support and Resistance Recalibration

What traders are watching most carefully is how support levels have shifted dramatically lower. The previously reliable $4720 barrier has been abandoned, and the new critical support zone has migrated down to $4400-4500—what technical analysts refer to as a “square low” setup, where previous resistance and current support intersect on multiple timeframes. A failure to hold this area could unleash selling pressure toward $4000.

Short-term resistance has risen to $4620-4660 on the 4-hour charts. For bulls to regain control, this zone must be reclaimed with meaningful volume backing the move.

What Triggered the Selloff?

Macro Spillover Effects

US economic data caught markets off guard. August PPI readings came in hotter than expected, dampening hopes for aggressive Federal Reserve rate cuts. This triggered simultaneous weakness across both equities and cryptocurrencies. While traditional stock indices barely moved (closing near flat), the crypto market cap contracted by 3.9% in just 24 hours, currently trading at $4.09 trillion.

Bitcoin didn’t escape the pressure either, dropping below $118,000 early in the session and dragging the broader alt ecosystem down with it.

Ethereum’s Internal Technical Correction

Beyond macro factors, ETH had accumulated serious overbought conditions. Year-to-date gains of 21.38% (measured through August 14) had pushed the asset within 6.82% of its historical peak of $4865. Profit-taking became inevitable. On-chain monitoring showed a net $55 million outflow from exchanges on August 14, indicating smart money was scaling out at elevated prices.

Ecosystem Tokens Amplify the Pain

Ethereum-based tokens (including REZ, SSV, and EIGEN) saw even steeper declines of 14-16%, which only intensified panic selling and accelerated the broader market deterioration.

Current Technical Landscape: What the Charts Reveal

The 4-hour timeframe tells the story most clearly:

• Critical Support Zone: $4400-4500 (where the square low forms). This is where previous density and current support converge. Breaking below means targeting $4205 (the 21-day moving average) and potentially $4000 in extreme scenarios.

• Immediate Resistance: $4620-4660, marked by the 4-hour midline and volume-weighted average price. Volume confirmation is essential for a breakout here.

• Major Overhead Supply: $4870 represents historical liquidity and the upper boundary of the current price channel. This is where significant selling could emerge on a recovery attempt.

• Deep Pullback Target: $4205 serves as the 21-day simple moving average—a key trend reversal signal if touched.

Real-Time Market Cross-Currents

Divergence in Related Assets

The broader market is sending mixed signals. Bitcoin mining company TeraWulf (WULF) surged 59.52% on an AI partnership announcement, while Circle (CRCL) declined 9.08%. This divergence reflects selective interest rather than broad risk-off sentiment.

Leverage Cooling Down (Bullish Sign)

The average funding rate for ETH across the network has dropped to just 0.009% over 8 hours (0.01% on major centralized venues). This indicates that leveraged long positions are unwinding, which paradoxically suggests the market is stabilizing rather than cascading into a death spiral.

Scenario Analysis: The Road Ahead

Bull Case

If support holds at $4500 and conviction returns, a push through $4620-4660 resistance could target the $4750-4870 zone. A decisive break above $4870 might even challenge the psychological $5000 level, though this scenario requires both technical breakthrough and volume support.

Bear Case

Conversely, breaking below the $4400 square low would confirm a deeper pullback toward $4205 (21-day moving average). In a severe scenario, weakness could extend all the way to $4000, especially if macro headwinds intensify or leverage capitulation accelerates downward.

Practical Guidance for Different Trader Types

Current volatility demands disciplined risk management. Short-term traders should closely monitor whether the $4500 support holds—this is the line in the sand. Break it, and the setup turns bearish.

Medium to long-term investors can begin accumulating, but must remain cautious: reserve dry powder to average down if the deep pullback target of $4205 is reached. The “square low stock alert” suggests this is neither a time for aggressive buying nor panicked selling—it’s a time for calculated positioning.

Real-time updates and deeper on-chain metrics can be tracked through dedicated market data platforms for continuous monitoring.