Ethereum (ETH-USD) Battles to Reclaim $3K – Can Bulls Prevent a Collapse to $1,700?

Ethereum (ETH-USD) Navigates Market Volatility Amidst Bearish Pressure and Institutional Accumulation

Ethereum Struggles Below $3,000 as Selling Pressure Mounts

Ethereum (ETH-USD) has faced continued selling pressure, with its price struggling to reclaim the $3,000 level. Currently trading at $2,635.51, ETH has lost 16% in the past week and remains down over 20% month-to-date as bearish sentiment dominates. After failing to break the critical $4,000 resistance, Ethereum has steadily declined, breaching key support levels. It found temporary support around $2,200, but as long as ETH trades below the 200-day moving average of $3,000, the risk of further downside remains high.

Despite the bearish trend, Ethereum still commands a strong market presence. Trading volume remains high, suggesting continued interest from institutional and retail investors. With Bitcoin showing resilience above $95,000, Ethereum is expected to follow, but it must first overcome critical resistance zones before a sustained uptrend can materialize.

Key Technical Indicators Highlight Persistent Weakness

Ethereum’s Relative Strength Index (RSI) currently sits at 44.7, maintaining a neutral stance since February 3 after briefly plunging to 16.7 on February 2. While this suggests that bearish momentum has eased, ETH has struggled to push RSI above the key 50 level, indicating that buying pressure remains weak. If ETH can break above this threshold, it would signal a shift toward bullish control, but failure to do so could keep it in a consolidation phase or trigger another leg down.

Directional Movement Index (DMI) data reinforces this bearish sentiment. Ethereum’s Average Directional Index (ADX) is currently at 34.2, indicating that ETH remains in a defined downtrend. The -DI line sits at 28.9, significantly higher than the +DI line at 16.7, confirming that sellers are still in control. Although selling pressure has eased slightly, ETH remains at risk of further downside before any substantial recovery takes hold.

Institutional Accumulation Suggests Long-Term Confidence

While Ethereum faces short-term selling pressure, institutional interest remains strong. Investment giant BlackRock has acquired approximately $280 million worth of Ethereum ETFs, signaling confidence in ETH’s long-term potential. Other major firms, including Fidelity and President Donald Trump’s crypto-focused World Liberty Financial, have also made large ETH purchases, supporting a bullish outlook despite near-term volatility.

Additionally, on-chain data shows a net outflow of $180 million in ETH from exchanges over the past 48 hours. Historically, such outflows indicate accumulation, reducing selling pressure and laying the groundwork for future price increases. However, Ethereum must reclaim $3,000 to validate these accumulation signals and confirm the start of a new uptrend.

Whale Activity and Layer-2 Expansion Present Mixed Signals

Ethereum’s economic model is facing challenges from growing competition and layer-2 migration trends. JPMorgan’s latest report warns that Ethereum is losing market share to alternative blockchains such as Solana (SOL-USD) and that increased reliance on layer-2 solutions could divert network activity, leading to lower transaction fees and validator revenues.

At the same time, on-chain data reveals that whales have been reducing their ETH holdings. Wallets holding over $10 million in ETH have collectively sold off $66.43 billion in the past week, representing a 17% decline in large wallet holdings. This indicates that high-net-worth investors remain cautious about Ethereum’s near-term trajectory.

Ethereum Faces Critical Support and Resistance Levels

Ethereum is currently trading within a descending channel and struggling to break above $2,800 resistance. If ETH manages to clear $2,880, the next upside target would be $3,500, representing a 22% potential increase. However, failure to reclaim key levels could result in a drop toward $2,200, or in a worst-case scenario, $1,700, which has been identified as the next major support zone.

In the longer term, experts see $2,500 as a make-or-break level. If ETH holds above this price, it could trigger a rally toward $4,000 or even $6,000. However, if it fails to maintain this support, a deeper correction to $1,700-$1,800 is possible.

Ethereum remains in a precarious position, with institutional accumulation signaling long-term confidence, but technical indicators still favor sellers. If ETH can break key resistance levels and sustain momentum, a strong recovery could follow. However, the risk of further downside remains unless market conditions shift in favor of buyers.

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