Ethereum's Price Declines: Approaching a Bear Market?

Ethereum’s price is experiencing a downward trend, breaking through significant support levels and indicating the possibility of entering a bear market.

Key Takeaways

Ethereum has fallen below crucial support at $3,500, showing signs of a bearish trend.
The recent price movement suggests potential further declines toward the $2,100 level.
Any short-term rallies are likely to be temporary unless a strong resistance is reclaimed.

ETH price weakness continued with bearish market structure.

Overview of Ethereum's Price Action

Ethereum's price action has entered a critical stage as it drops beneath vital structural support zones that previously supported bullish momentum. Currently trading below the $3,500 mark, many high-time-frame support levels have now turned into resistance. This shift indicates that the broader trend might be aligning with the early phases of a bear market.

Technical Analysis of Ethereum's Price

Ethereum price unravels as downside pressure mounts, early stages of a bear market? - 1
ETHUSDT (1D) Chart, Source: TradingView

Ethereum’s recent drop below the $3,500 mark represents a significant structural change in its current market cycle. This area was previously a strong support level, but it has now flipped to a resistance level. Furthermore, the alignment of the 200-day moving average in this zone further validates the bearish shift and confirms that ETH is trading below essential trend indicators.

After breaking down, Ethereum's price has swiftly moved downward, approaching the $2,600 area. This level is historically significant and may trigger a short-term oversold bounce. However, any bounce from here is unlikely to alter the overall downward trajectory, as it would likely only produce a lower high within the prevailing bearish structure. Ethereum has consistently formed lower lows and lower highs, indicative of sustained downward momentum.

Even if a short-term rally occurs from $2,600, the overall technical outlook points toward further downside risks. The primary target from a structural perspective remains the $2,100 range low. Ethereum seems to have settled into a new lower range, increasing the likelihood that the price could gravitate toward the lower end of that range. It is common for markets to fluctuate between range highs and lows, and Ethereum appears to be exhibiting this pattern.

A decline to the $2,100 level would represent a retest of a major macro-level support zone. This scenario aligns with the pattern of a deeper correction after previous failed attempts to reclaim overturned support. While traders might spot short-term opportunities due to overselling conditions, these potential gains are corrective in nature rather than indicative of a trend change in the current environment.

Future Price Expectations

A temporary bounce from the $2,600 level is feasible, but it is more likely to form a lower high before subsequent downward moves. If Ethereum remains below the $3,500 mark, the chances of declining toward the $2,100 range low will increase. A solid reclaim of resistance is necessary to contest the current bearish outlook.