Ethereum is experiencing intensified bearish momentum as the cryptocurrency”s price action has consistently formed lower highs and lows. This trend indicates that sellers are firmly in control, and market sentiment remains cautious.
The daily chart for ETH reveals a pronounced downtrend, with recent price movements confirming a breakdown below the $2,512 threshold, which has accelerated the selling pressure. Analysts have identified critical support levels between $1,960 and $1,900, where buyers have shown initial interest. However, the more significant structural support lies at $1,740. A drop below this level could lead to a further decline towards the demand zone between $1,600 and $1,500.
Technical indicators, including the Ichimoku cloud, illustrate persistent resistance overhead, making bullish attempts challenging. The recent price action also reflects a strong rejection near the 0.5 Fibonacci retracement level around $3,347, reinforcing the macro resistance area.
The current market dynamics highlight a decrease in open interest within the derivatives market. Following a period of growth, open interest has now dropped to approximately $23 billion, signaling that traders are unwinding their leveraged positions in light of the recent price weakness. This trend often indicates uncertainty among participants, as they appear reluctant to commit to aggressive strategies.
Spot flow data further illustrates a mixed sentiment among investors. While there were earlier spikes in inflows, suggesting short-term selling pressure, later outflows indicated that many traders were moving their assets off exchanges, which could reduce immediate sell supply. This shift in behavior points to a wait-and-see approach as traders balance between accumulation opportunities and risk mitigation.
Looking ahead, Ethereum”s price trajectory will depend on whether bulls can successfully defend the $1,900 support zone. A failure to maintain this level may result in a significant decline towards the next critical support at $1,740. Conversely, reclaiming the resistance range between $2,234 and $2,512 could provide the necessary momentum for a recovery attempt.
Overall, the prevailing market conditions favor sellers, but key support levels remain under observation as traders await clearer directional cues.
