ETH Faces Key Test at $3,850 Amid Possible Correction

• ETH needs a 1D close above $3,850 to stay bullish.
• Failing that, an ABC correction toward $3,100 is likely.
• Overbought RSI hints at consolidation before $4K breakout.

ETH at a Technical Crossroads

Ethereum ($ETH) is entering a crucial phase over the next two weeks, with price action signaling a potential short-term correction—unless bulls can push above a key resistance level. According to analysts, ETH must reclaim and hold above $3,850 on the daily (1D) timeframe to maintain its current bullish momentum.

If it fails to do so, a common corrective structure known as an ABC correction could unfold, targeting the $3,100 zone. This would be a healthy retracement after the strong rally ETH has seen in recent months, and it wouldn’t necessarily damage the broader bullish structure.

RSI Flashes Overbought: What It Means

On the 3-day chart, the Relative Strength Index (RSI) has entered overbought territory, typically a signal that the asset could be due for a pause or pullback. However, it’s important to note that overbought RSI doesn’t guarantee a reversal—it could simply indicate the need for a consolidation phase before the next leg higher.

There’s also a scenario where ETH continues to climb toward $4,000+ even if the RSI doesn’t make a new high. This divergence wouldn’t invalidate the overall uptrend—it would just suggest a slower, steadier pace.

Short-Term Dip, Long-Term Strength?

If the correction scenario plays out, it could set ETH up for a strong rebound by the end of the month, potentially leading to new highs and a solid monthly close. The key takeaway is that both outcomes—whether it’s a breakout above $3,850 or a dip to $3,100—still align with the high-timeframe (HTF) bullish outlook for Ethereum.

Investors and traders should keep a close eye on price action around $3,850 in the coming days. That level may determine whether ETH needs a breather—or is ready to charge toward new highs.

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