diff --git a/echo/frontend/src/hooks/useConversationMonitor.test.tsx b/echo/frontend/src/hooks/useConversationMonitor.test.tsx
new file mode 100644
index 00000000..fc56eb6d
--- /dev/null
+++ b/echo/frontend/src/hooks/useConversationMonitor.test.tsx
@@ -0,0 +1,118 @@
+// @vitest-environment jsdom
+import { QueryClient, QueryClientProvider } from "@tanstack/react-query";
+import { act, renderHook } from "@testing-library/react";
+import type { ReactNode } from "react";
+import { afterEach, beforeEach, describe, expect, it, vi } from "vitest";
+import { useConversationMonitor } from "./useConversationMonitor";
+
+const captureMock = vi.hoisted(() => vi.fn());
+vi.mock("posthog-js", () => ({ default: { capture: captureMock } }));
+
+// Keep React Query idle so only the SSE path drives `isStreaming`.
+vi.mock("@/lib/bff", () => ({
+	bff: { get: () => new Promise(() => {}) },
+}));
+
+// A fake EventSource whose error/snapshot we drive by hand.
+class FakeEventSource {
+	static last: FakeEventSource | null = null;
+	onerror: (() => void) | null = null;
+	listeners = new Map<string, (event: Event) => void>();
+	closed = false;
+	constructor() {
+		FakeEventSource.last = this;
+	}
+	addEventListener(type: string, cb: (event: Event) => void) {
+		this.listeners.set(type, cb);
+	}
+	close() {
+		this.closed = true;
+	}
+	emitSnapshot() {
+		const event = new MessageEvent("snapshot", {
+			data: JSON.stringify({
+				conversations: [],
+				live_window_seconds: 60,
+				summary: {},
+			}),
+		});
+		this.listeners.get("snapshot")?.(event);
+	}
+	emitError() {
+		this.onerror?.();
+	}
+}
+
+const latestSource = (): FakeEventSource => {
+	if (!FakeEventSource.last) throw new Error("no EventSource opened");
+	return FakeEventSource.last;
+};
+
+const wrapper = ({ children }: { children: ReactNode }) => {
+	const client = new QueryClient({
+		defaultOptions: { queries: { retry: false } },
+	});
+	return <QueryClientProvider client={client}>{children}</QueryClientProvider>;
+};
+
+describe("useConversationMonitor stream degradation", () => {
+	beforeEach(() => {
+		vi.useFakeTimers();
+		captureMock.mockClear();
+		FakeEventSource.last = null;
+		vi.stubGlobal("EventSource", FakeEventSource);
+	});
+
+	afterEach(() => {
+		vi.unstubAllGlobals();
+		vi.useRealTimers();
+	});
+
+	it("ignores a brief flap that recovers inside the grace window", () => {
+		const { result, unmount } = renderHook(
+			() => useConversationMonitor("p-flap"),
+			{ wrapper },
+		);
+		const source = latestSource();
+		act(() => source.emitSnapshot());
+		expect(result.current.isStreaming).toBe(true);
+
+		// Drops, then recovers before the grace window elapses.
+		act(() => source.emitError());
+		act(() => {
+			vi.advanceTimersByTime(4000);
+		});
+		expect(result.current.isStreaming).toBe(true);
+		act(() => source.emitSnapshot());
+
+		expect(captureMock).not.toHaveBeenCalled();
+		act(() => unmount());
+	});
+
+	it("reports a sustained outage and its paired recovery", () => {
+		const { result, unmount } = renderHook(
+			() => useConversationMonitor("p-outage"),
+			{ wrapper },
+		);
+		const source = latestSource();
+		act(() => source.emitSnapshot());
+
+		// Stays down past the grace window: now a real degradation.
+		act(() => source.emitError());
+		act(() => {
+			vi.advanceTimersByTime(10000);
+		});
+		expect(result.current.isStreaming).toBe(false);
+		expect(captureMock).toHaveBeenCalledWith("monitor_stream_degraded", {
+			project_id: "p-outage",
+		});
+
+		act(() => source.emitSnapshot());
+		expect(result.current.isStreaming).toBe(true);
+		expect(captureMock).toHaveBeenCalledWith(
+			"monitor_stream_reconnected",
+			expect.objectContaining({ project_id: "p-outage" }),
+		);
+		act(() => unmount());
+	});
+});
diff --git a/echo/frontend/src/hooks/useConversationMonitor.ts b/echo/frontend/src/hooks/useConversationMonitor.ts
index e1377655..f3225005 100644
--- a/echo/frontend/src/hooks/useConversationMonitor.ts
+++ b/echo/frontend/src/hooks/useConversationMonitor.ts
@@ -157,6 +157,13 @@ const EMPTY_SUMMARY: MonitorSummary = {
 // SSE is the primary channel; React Query is the fallback (first fetch + poll).
 const FALLBACK_POLL_MS = 5000;
 const SAFETY_POLL_MS = 30000;
+// A dropped SSE connection auto-reconnects within a browser retry cycle (~3s)
+// and the fallback poll covers the gap, so a brief flap never reaches the host.
+// Wait out this grace window before treating the stream as down: only a stream
+// that fails to recover across several reconnect attempts is a real degradation.
+// Keeps the "Reconnecting" badge and the monitor_stream_degraded event tied to
+// genuine, host-visible outages instead of routine reconnects.
+const MONITOR_DEGRADE_GRACE_MS = 10000;
 
 type StreamState = { data: MonitorResponse | null; connected: boolean };
 
@@ -220,16 +227,18 @@ const openSource = (projectId: string, conn: SharedConnection) => {
 		}
 	});
 	source.onerror = () => {
-		// Auto-reconnects; mark down meanwhile so consumers fall back to the poll.
-		conn.state = { connected: false, data: conn.state.data };
-		notify(conn);
-		// Debounce ~3s so a brief reconnect flap doesn't emit a degrade/reconnect pair.
+		// EventSource auto-reconnects on its own; hold "connected" through the
+		// grace window so a brief flap doesn't flip the badge or emit a
+		// degrade/reconnect pair. Only when the stream stays down past the window
+		// do we mark it down (so consumers fall back to the fast poll) and report.
 		if (!conn.degradeTimer && conn.degradedAt === null) {
 			conn.degradeTimer = setTimeout(() => {
 				conn.degradedAt = Date.now();
+				conn.state = { connected: false, data: conn.state.data };
+				notify(conn);
 				posthog.capture("monitor_stream_degraded", { project_id: projectId });
 				conn.degradeTimer = null;
-			}, 3000);
+			}, MONITOR_DEGRADE_GRACE_MS);
 		}
 	};
 };