Ethereum Retreats Below $3,700 as Rally Cools, Analysts Caution Against Overheating

Ethereum (ETH) pulled back more than 3% to $3,696 on Monday, pausing its multi-week rally toward $4,000 amid growing technical pressures and heightened caution from market analysts.

Despite steady institutional accumulation and strong whale activity, ETH’s recent gains appear to be losing momentum. The drop comes after a two-week stretch of outperformance versus Bitcoin, with some analysts now warning that the rally may be due for a correction.

Market intelligence platform Front Runners noted ETH has outpaced BTC for 14 straight days—a trend they described as “unsustainable without a consolidation phase.” They also pointed to an overheated RSI and rising speculative sentiment.

Michaël van de Poppe and Andrew Crypto echoed similar views, highlighting ETH’s drop to $3,650 and citing risks of a sharper pullback. “Insane strength, but a healthy correction is due,” said Andrew Crypto, following ETH’s rejection at a key resistance zone.

Still, bullish conviction persists. Prominent trader Crypto Rand reiterated a target of $4,000, calling the move “programmed.” On-chain metrics support that outlook, with whale accumulation reaching new highs, according to CryptoQuant data shared by Crypto Rover.

Institutional interest continues to grow. SharpLink Gaming (SBET), one of the largest ETH-holding public firms, revealed a fresh purchase of 79,949 ETH last week—their biggest weekly buy since adopting a crypto treasury strategy in June. The company now holds 360,807 ETH and disclosed an additional $96 million in dry powder for future buys.

While Ethereum remains up significantly over the past month, analysts suggest further upside may require a cooldown. “A sustainable rally needs healthy pullbacks,” said Andrew Crypto.

At the time of writing, ETH trades at $3,696, down 3.44% over the past 24 hours.

Technical Overview: ETH/USD

• Price Range: ETH dropped from $3,851 to a low of $3,624 between July 21 and July 22, marking a 6.1% decline.
• Volume: Trading volume surged to 353,275 units early on July 22, well above the 24-hour average.
• Resistance: Persistent rejection around $3,730–$3,740 capped upside attempts.
• Support: Key zones at $3,690, $3,670, and $3,650 were broken amid intense liquidation.
• Intraday Action: Between 13:09 and 14:08 UTC, ETH dropped 1.25% in under an hour, with a dramatic volume spike to 24,478 units per minute.
• Momentum: Bearish pressure dominated the close, with ETH finishing the session near lows at $3,647.