Analyst Warns of a Potential Drop as ETH Is ‘Looking Weak’

The asset’s price may retrace in the short term before giving trades a better opportunity to open long positions.

Earlier this month, it seemed like Ethereum (ETH) was on its way to reclaim $2,500, but the bears intercepted the move.

Currently, the asset trades at around $2,300, and some analysts believe a more substantial correction could be knocking on the door. On the other hand, certain on-chain indicators suggest that the bulls might regain control in the near future.

Plunge on the Way?

According to X user Ted, the asset is “looking weak” right now. He claimed that Bitcoin has reclaimed its key level, while the second-largest cryptocurrency keeps getting rejected from the $2,400 resistance zone.

The analyst added that the major support zone for ETH is around $2,200-$2,250 and claimed that a drop to that range won’t be a surprise before a rebound forms.

Prior to that, Ted has been paying attention to the asset’s sideways movement lately. He predicted that this week would be “very crucial” for the market, citing uncertainty surrounding the ongoing peace talks between the USA and Iran.

“If Ethereum manages to reclaim the $2,400 level, it’ll tap the $2,470-$2,500 liquidity. And if it loses the $2,300 zone, a retest of the $2,150-$2,200 support level will happen quickly,” he stated.

Crypto Tony – a popular trader with almost 600,000 followers on X – also weighed in, saying they await a plunge to the support level of around $2,290, which could offer the opportunity for opening a possible long position.

The Indicators Point in a Different Direction

Contrary to the aforementioned skepticism, several metrics suggest that ETH could be on the verge of a price rally. First on the list is the Relative Strength Index (RSI), which has dropped to 30. This means that the asset has entered oversold territory and could be due for an upward move.

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Next is the declining amount of ETH stored on exchanges. CryptoQuant’s data shows that the figure recently tumbled to a nearly 10-year low of approximately 14.47 million. This development is seen as bullish since it reduces the immediate selling pressure.

Last but not least, there is renewed interest from institutional investors. According to SoSoValue, spot ETH ETFs have seen significant inflows lately, indicating that pension funds, hedge funds, and other big players are ramping up their exposure to the asset, forcing the issuers of these products to back the purchased shares with actual Ethereum.