The Ethereum market showed mixed signals as price action weakened while the long-term structure and fundamentals remained constructive.
After falling below $3,000 and erasing around 16% of January 2026 gains, ETH entered a volatile consolidation phase. Technical trends were bullish, but momentum indicators warned of a pause.
This divergence left traders wondering if buyers could defend the structure or if downward pressure would intensify.
Ethereum completes its bullish pennant over a one-month period
On January 25, Ethereum (ETH) completed a bullish pennant on the monthly time frame. This trend has attracted traders looking for long-term gains. As ETH approaches key support on lower timeframes, many expected a breakout.
Source: TradingView
A single bullish catalyst was enough to trigger the breakout of the bull pennant. However, the MACD’s bearish crossover at $2,942 prompted caution.
As price persisted in this critical zone, the question remained: would the bullish pattern hold or would the downside pressure trigger a correction?
Whales absorb dips, retail continues highs
According to data from CryptoQuant, whales have been steadily accumulating Ethereum, clearly positioning themselves for long-term gains. Their confidence in the future of Ethereum was evident when they took advantage of the drop from $2.6 to $3,000.
Source: CryptoQuant
Meanwhile, retail investors have been caught up in short-term price swings, clustering around local highs and adding to market volatility.
The stark contrast between the calculated movements of whales and the reaction of retailers painted a picture of a market torn between those with a long-term view and those motivated by the noise of immediate fluctuations.
Ethereum TVL Holds as Valuation Debate Intensifies
Ethereum’s total value locked (TVL) stood at nearly $331 billion, reinforcing the network’s underlying strength despite price weakness.
Source: Token Terminal
Historically, periods where ETH traded below ecosystem value coincided with long-term accumulation zones. Previous instances resulted in strong rallies after volatility subsided.
Even so, TVL alone did not guarantee an immediate rise. The market still faces headwinds and an uncertain risk appetite.
This balance allowed traders to monitor whether the dip buying would persist or the losses would extend further.
Final Thoughts
- Ethereum’s recent pullback has highlighted a familiar tension between short-term momentum and long-term conviction.
- Although whale accumulation and network strength have offered structural support, near-term price direction could depend on whether selling pressure actually exhausts or persists.
