Ethereum’s price hit its projected breakdown target near $1,800 in early February, even slipping to $1,740. It then rebounded almost 23%, giving traders hope. However, rebounds inside downtrends can be misleading. The current bounce appears to lack strong buyer support.
Charts and data suggest the rebound is weak. A hidden bearish divergence has formed. This means short-term momentum improved while the price failed to make higher highs. Sellers remain active in the background.
The price action is forming a bearish continuation pattern known as a pole and flag. This often leads to another downward move. On-Balance Volume, which tracks buying and selling pressure, is staying weak. It is not rising to match the price rebound. This indicates a lack of real buyer conviction.
On-chain data reveals who is driving the activity. The rebound is being led by short-term traders. A metric called short-term holder NUPL shows these traders rushed to buy the dip after heavy losses. Their position improved by about 35% during the bounce.
Meanwhile, long-term Ethereum holders have been increasing their selling. Data shows an 82% rise in net selling from this group over four days. This signals weak conviction at current price levels from the most committed investors.
For the bearish outlook to be invalidated, Ethereum must reclaim key resistance near $2,150. Until then, downside risks are prominent. Important support levels to watch are near $1,990 and $1,750.
A break below $1,750 would expose the $1,500 zone. If the bearish flag pattern completes, the projected move points toward $1,000. This would represent a drop of nearly 50% from recent levels.
In summary, Ethereum remains below major resistance. Trading volume is weak. Long-term holders are selling, while short-term traders dominate. Until these conditions change, the risk of a deeper price decline remains.
