The article has been updated to include a new post by Lookonchain.
The Ethereum price is now in a bearish top structure, as outflows from institutions, leveraged shorts and waning momentum are pushing the token down below $2150.
The following is a summary of the information that you will find on this page.
- Analysts warn of possible drops towards $1,900 after the price of Ethereum formed a bearish round top pattern.
- U.S. Ethereum spot ETFs have seen outflows for nine consecutive sessions. In one week, 114,871 Ethereum worth $244.79 millions left the funds.
- The heatmap of liquidation showed that there was a lot of resistance around $2,150. A trader took ETH positions worth $100 million.
Crypto.news reports that Ethereum (ETHAt the time of publication, the price had fallen by nearly 12% in just seven days. As traders continued to move capital towards Bitcoin, the token’s price briefly recovered from its psychological support level of $2,000 as risk appetite for altcoins decreased.
A part of recent pressure to sell emerged shortly after the U.S. Senate Banking Committee approved the CLARITY Act On May 19, The news of the breakthrough in regulation did not cause a rally to continue, but rather a massive sell-the-news response across Ethereum markets. This was due to traders locking up their profits as a result of weeks of speculative positions ahead of voting.
Institutional sentiment deteriorated further after JPMorgan published a bearish report warning that Ethereum’s future upgrades, including Glamsterdam and Hegotá, could continue weakening the network’s fee-burning mechanism.
The bank has analysts who are experts in the field argued The thesis was that the falling Layer-2 transaction cost reduced ETH burn enough to maintain a structural inflationary asset rather than a deflationary one. This theory damaged investor confidence.
On Friday, the spot Ethereum ETFs traded in the United States saw their 10th trading session with net outflows. Data Compilation by SoSoValue reveals that in the last week, approximately $215 million left the fund. This persistent selling spree removed a significant source of liquidity for the buy-side just as Bitcoin attracted institutional inflows.
The data on the blockchain also showed a waning confidence amongst large holders. Whale addresses with significant ETH holdings reportedly decreased from 1,100 USD to 1,030 USD during the correction.
While the ETH/BTC has fallen to its lowest levels this year (0.027), it highlights Ethereum’s relative underperformance compared to Bitcoin. Investors are increasingly favoring the safe-large-cap asset.
A temporary ceasefire and partial opening of the Strait of Hormuz were discussed by both the United States of America and Iran.
On Monday, following headlines in the media, Oil prices dropped 5$ and reached $91; this reduced immediate inflation worries. It also helped Ethereum to stabilize at $2,000+ after several sessions dominated by aggressive liquidation.
Does Ethereum form a bearish major reversal?
Ethereum’s daily chart shows what looks like a bearish round top pattern that stretches from late April into mid-May. Structure developed when ETH repeatedly failed to maintain momentum above $2,400, slowly transitioning from higher peak into a curved pattern, before breaking down.
The top round neckline, around $2.150, has become an immediate barrier. Ethereum tried to reclaim this level in the recent rebound, but sellers rejected it quickly. This reinforced the bearish influence on short-term prices.
The technical indicators are still pointing downward. Ethereum continues to trade below both the Supertrend and 50-day moving averages, around $2.264, as well as the resistance at $2.318. The long-term moving average of 200 days near $2541 has continued to trend downward, showing a weaker overall trend, despite the temporary rallies.
A breakdown projection from the rounded top pattern points toward a possible move into the $1,850–$1,900 range if sellers regain momentum. This target is in line with the support area visible at the bottom of the chart during the consolidation phase that took place between February and March.
While data from CoinGlass indicates a heavy concentration of leverage in the range between $2,150 to $2,170. These figures create a liquidity barricade directly above present price levels. In that region, bright clusters of liquidation indicate many short positions may be forced off if ETH successfully reclaims the resistance. A short squeeze could then occur towards $2250.
However, the downside liquidities are still substantial under $2,050, and also near $2,000, which is the psychological threshold. If the zones are breached, it could lead to a rapid acceleration of long liquidations as well as increased volatility in perpetual futures.
Lookonchain’s blockchain tracker revealed that one trader had recently taken a huge 23x leveraged Ethereum position, worth over $100 million. The position, according to the blog post, involved approximately 47,600 ETH at a price of around $2,149. This placed the trade right next to Ethereum’s resistance cluster.
Ted Pillows is another analyst who has warned about Ethereum being trapped under a zone of critical supply.
“ETH bounced back from the $2,000 support level but got rejected from the $2,150 resistance zone,” He wrote On X. “If Ethereum manages to reclaim the $2,150 zone, it could rally quickly towards $2,250. A failure to reclaim means $2,000 will be retested soon.”
The funding rates on major exchanges for derivatives are also starting to turn negative, indicating that traders have begun positioning themselves more and more in anticipation of a continued decline. Open interest remains high despite recent market corrections, which is an indication that traders are continuing to make leveraged bets.
What can invalidate Ethereum’s bullish setup?
Ethereum, despite mounting bearish indicators, has yet to confirm a trend collapse. Bulls are defending $2,000 aggressively and the repeated rebound from this area indicates that there is still a strong demand for spot at lower levels.
The rounded structure would be significantly weakened by any sustained movement back above 2,150. A breakout of this magnitude could cause leveraged shorts, particularly given the liquidation clusters above resistance, to quickly unwind. Ethereum would then be able to return quickly to the $2.250 and $2.400 levels.
Moreover, progress in U.S. – Iran negotiations or a more rapid decline in crude prices could improve risk appetite overall and reduce inflation worries tied to the energy markets. The crypto market would benefit from this, especially the large-cap assets like Ethereum.
Federal Reserve expectations are another important factor. The incoming U.S. data on inflation and the labor market will continue to be closely watched by traders for clues about future interest rates. Any signs that support earlier rate reductions could weaken and boost demand for speculative investments.
The stablecoin market on Ethereum is also a bullish factor. It still controls the global settlement of stablecoins, and high levels of issuance suggest that blockchain activity is not in decline despite prices falling.
Ethereum, for now, is stuck between the heavy resistance of $2,150, and fragile support, which stands at $2,000 The decision to move out of this range could determine if the current structure will evolve into a more severe crash, or if it is merely a short-term rally.
Disclosure: The article is not intended to be investment advice. This page is intended for informational purposes only.
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Source: crypto.news
