The price of Ethereum is at risk of a 6% decline as it nears the neckline support of a developing head and shoulders pattern. Recent data from Coinglass indicates a rise in ETH futures open interest, climbing from $35.2 billion to $38.4 billion. This bearish sentiment is further reinforced by a crossover between the 100-day and 200-day exponential moving averages, signaling a potential continuation of the downtrend.
As of December 23rd, Ethereum”s price has dipped by 1.65%, settling at $2,964. This drop reflects a broader correction trend within the cryptocurrency market, particularly as Bitcoin appears poised for another reversal from the $90,000 threshold. Despite the prevailing selling pressure, institutional investors are actively accumulating Ethereum. On-chain metrics show that various altcoins are currently outperforming Bitcoin.
Since the previous weekend, Ethereum has experienced low volatility, trading below the $3,000 psychological barrier. The daily trading chart reveals numerous short-bodied candles accompanied by low trading volume, indicating a lack of decisive movement from both buyers and sellers. However, there has been a slight bullish attempt to break through resistance levels, likely driven by future momentum.
According to Coinglass, the open interest associated with Ethereum futures has surged by 9%, indicating that traders are entering new contracts in anticipation of significant price movements in the near future. Institutional demand for Ethereum continues to grow, particularly as we approach the end of 2025, with both traditional funds and specialized treasury strategies participating in the market.
In recent activity, London-based Fasanara Capital executed a leveraged strategy, purchasing approximately 6,569 ETH, valued at roughly $19.72 million. The firm subsequently utilized these tokens as collateral on the Morpho DeFi lending protocol, borrowing about $13 million in USDC to acquire additional ETH. Additionally, BitMine Immersion Technologies, an Ethereum treasury company chaired by Tom Lee of Fundstrat, has added 29,462 ETH, equating to around $88.1 million. These tokens were transferred from BitGo and Kraken, as part of BitMine”s ongoing accumulation strategy, which aims to build its holdings to 5% of the total supply.
The current bearish chart pattern suggests that Ethereum is set for a deeper correction. Over the past month, the price has displayed a sideways trend, oscillating around the $3,000 mark. This consolidation period aligns with market uncertainty and macroeconomic developments affecting the U.S. economy. In-depth analysis of the four-hour chart indicates that the price action has formed a traditional bearish reversal pattern known as head and shoulders, characterized by three peaks: a left shoulder, a prominent head, and a right shoulder. A decisive breakdown from the neckline support could see Ethereum approach support at $2,800.
The momentum indicator RSI currently stands at 48%, indicating a neutral to bearish market sentiment, which supports the likelihood of a support breakdown. Should this scenario play out, Ethereum could experience a further decline, potentially hitting immediate support at $2,600, and then $2,400. Conversely, should the neckline support hold firm, renewed buying pressure from institutional and futures traders could enable a recovery attempt, targeting a re-establishment above the $3,000 level.
