Ethereum (ETH) Flashing Bearish Divergence, What’s Next

With a 2.75% price uptick, Ethereum (ETH), the world’s second-largest cryptocurrency, reached a key resistance level of $3,865. The daily chart showed that the last time the asset touched this level, it dropped significantly. Ethereum price was flashing a similar signal at press time.

Ethereum (ETH) Formed a Bearish Divergence, Downside Momentum Ahead?

This negative signal emerged due to the formation of a bearish divergence in price on the four-hour chart.

TradingView technical analysis revealed that over the past few days, the price appeared to have formed a higher high. However, during this period, the momentum indicator, the Relative Strength Index (RSI), formed a lower low. That indicated weakening bullish momentum and a potential price reversal.

However, Ethereum price hasn’t shown any bearish confirmation or the formation of a bearish candlestick pattern at the top of the resistance that would initiate a downside move. When writing, there was a possibility of either a price decline or a breakout above the $3,860 level.

Ethereum Price Action and Technical Analysis

According to Ethereum (ETH) technical analysis, the asset was in an uptrend on a higher time frame. However, it appeared bearish due to a divergence on the lower time frame.

Based on the price action, if the ETH four-hour chart forms a bearish candlestick pattern or a strong red candle, it could signal downside momentum.

On the other hand, if this momentum continues and the price breaks out of the key resistance level, closing a four-hour candle above $3,860, the bearish outlook could be invalidated.

As of writing, ETH was hovering near $3,840 and has climbed 2.75% over the past 24 hours. This ongoing price rally signaled a potential recovery in the asset. That has increased investor and trader participation, leading to a 10% surge in trading volume.

Experts’ Bullish Outlook and Bold Price Prediction

Investors, whales, and institutions are strongly accumulating ETH despite the short-term bearish outlook. On July 27, 2025, a well-followed crypto analyst shared a post on X (formerly Twitter), stating that whales are staking Ethereum like never before.

In the post, the expert reported that Ethereum CME futures Open Interest (OI) has just surged to an all-time high of $7.85 billion. That marked the largest institutional positioning ever recorded for ETH.

You might be thinking, Why does this matter? The answer is that CME is where Wall Street and big funds operate, not retail traders.

This means institutions don’t gamble; they place bets based on conviction. Moreover, rising open interest indicates that a significant amount of capital is being committed to ETH futures.

Another crypto expert shared a post on X revealing notable institutional activity. In the post, the expert stated that DeFiance Capital has purchased $114 million worth of ETH. Along with highlighting this institutional activity, the expert made a bold prediction, saying that smart money knows Ethereum is headed to $10,000.

Adding to this optimism, a well-followed crypto firm shared a bullish outlook for investors and traders for August 2025. In a post on X, CryptoRover noted that August is historically a bullish month in post-halving years.

According to the data, the average recorded return for August in such years is 64.2%. If history repeats itself, experts predict that Ethereum price could reach $6,000 next month.