Ethereum, the second-largest cryptocurrency, is facing increased selling pressure following a recent bounce back above $3,600. The price of ETH has dropped below $3,400 in the last two days, with concerns mounting about a potential drop below $3,000.

Crypto analyst Ali Martinez has highlighted worries as Ethereum falls below the critical support level of $3,460. This has raised doubts about bullish sentiment in the market and could lead to further downward movement in Ethereum's price.

Without strong support at this level, there is a growing possibility of Ethereum's price continuing to correct towards $2,850 or even lower. Options trading activity has increased in the last 24 hours, particularly in selling calls and acquiring puts for Ethereum. This has put pressure on the spot ETH price and has led to high levels of implied volatilities.

In terms of price action, Ethereum faces immediate resistance at $3,400 and further hurdles at $3,420 and $3,450. Breaking through these levels could test the 50% Fibonacci retracement level and potentially reach $3,650. However, on-chain indicators for Ethereum show strength, with non-zero Ethereum addresses hitting a new all-time high in recent weeks.