Ethereum Price Prediction: ETH shows a weak rising wedge pattern, caution is needed for the "bull trap" as U.S. demand weakens.

The price of Ethereum (ETH) has fallen below $3,800 on the occasion of its tenth anniversary, after touching $3,900 earlier this week. Although global traders are still following the psychological barrier of $4,000, the latest on-chain data suggests that this rally may not be as strong as it seems. Despite ETH having risen by over 50% in the past month, it has only increased by 2% in the past week and has started to show cracks. The current market landscape has raised concerns about a bull trap, which could put latecomer investors in a difficult position.

CMF and OBV send opposing signals: Warning of weakening capital flow

(Source: Trading View)

The Chaikin Money Flow (CMF) indicator further supports the possibility that this is a bull trap. Over the past week, the CMF's highs have been consistently declining, indicating that the money flow is weakening, while ETH continues to reach new highs. The CMF is used to measure buy/sell pressure based on price and volume, so this divergence is often an early warning signal that the buying pressure is weakening - in other words, even though the price chart is still rising, real money is not flowing into the market.

In contrast, the On-Balance Volume (OBV) indicator has slightly increased, in sync with the price rise. OBV is used to measure total trading volume to assess whether there is "real demand." A continuous rise in OBV may mislead retail investors into believing that the market is still strong, while in reality, a large amount of capital is being withdrawn.

The divergence between CMF and OBV paints a worrying picture: behind the glamorous facade, the market is losing its true purchasing power. This divergence often forms the basis of a bull trap—trading volume appears healthy, but actual capital flow is drying up.

Ethereum price trend shows a weak ascending wedge pattern: a typical feature of a bull trap

(Source: Trading View)

The last part of the dilemma is the price trend of Ethereum, which is currently in a rising wedge pattern – a pattern that is generally considered bearish as it indicates a slowdown in momentum.

A few trading days ago, the price of ETH slightly broke through the upper trend line of the pattern (marked by the red arrow), soaring to $3,858, leading many traders to believe this was a genuine "breakout"—but it quickly fell back below $3,510. Such false breakouts are a typical feature of a bull trap: triggering a "fear of missing out" (FOMO) sentiment, and then suddenly reversing. As long as ETH remains in this wedge formation, the risk of repeated false breakouts remains high.

To break this pattern and develop positively, Ethereum needs to break through and maintain above $4,024—this is a strong resistance level from both a technical and psychological perspective. If this cannot be achieved, ETH is likely to retrace and test the support level of $3,510.

Conclusion:

In summary, although ETH is currently trading near high levels and appears to be on an upward trend, on-chain indicators and technical indicators warn that this rebound is weak and may evolve into a bull trap. Investors should carefully observe resistance/support levels and cash flow before making decisions.