Ethereum (ETH) is being dragged down by Bitcoin. It looks like there will be a sharp decline towards $3,200 or even $3,050 before a new up move is possible.

Ethereum has been steadily declining from the major resistance level of $4,000 over the past 4-5 weeks. Despite some positive news for ETH, crypto market sentiment remains weak. More importantly, Bitcoin has faced multiple rejections that have caused the price to drop below $65,000.

Ethereum (ETH) broke below the $3,600 and $3,500 support levels. The bears succeeded in pushing the price towards the 50% Fibonacci retracement level of the upward move from the $2,824 low to $3,975 high.

The past 4-5 weekly candles show an increase in bearish sentiment. Therefore, Ethereum is likely to face more downside risks. The first important support is near $3,265. It is close to the 61.8% Fibonacci retracement level of the upward move from the $2,824 low to $3,975 high.

The main support seems to be formed near $3,200. There is also a key uptrend line in place on the weekly chart with current support at $3,200.

ETH price might face downside pressure near or slightly above the trendline and then see if the bears can gain a foothold. If the bulls fail to protect a weekly close below the trendline, there could be a sustained downtrend. In such a case, the price could drop to a low of $2,825.

The next important support is near $2,550 at the 50-week simple moving average (blue line). It is also close to the 1.236 Fibonacci extension level of the upward move from the $2,824 low to $3,975 high. Further declines could push the price towards the $2,120 support area.

Ethereum is likely to remain above the trendline support and attempt to move up again. An immediate resistance is near $3,550. The first significant resistance is at $3,650. If the price breaks above the $3,650 resistance, it could open the doors for an attack towards the $3,880 resistance.

The next key resistance could be $4,000. A close above $4,000 could spark an uptrend that could target the $4,200 resistance level. Further gains could push the price towards $4,500 in the coming weeks.

Overall, Ethereum price is showing some bearish signals below $3,550. If the bulls fail to protect a weekly close below $3,200, a further decline to $2,825 is likely. Conversely, the price could rise again to $3,880 in the coming weeks.