Ethereum (ETH) Risks Another Drop: Familiar Bearish Pattern Flashes Warning

Ethereum has recovered strongly from its recent lows, yet the structure behind that move is starting to raise caution. Price bounced from around $1,820 earlier this year and climbed close to key resistance zones, but the broader pattern now looks similar to what played out during the 2022 cycle.

Back then, Ethereum dropped from around $3,700 to nearly $800 before staging a temporary recovery above $2,000. That rebound did not mark a full reversal. Price later declined again, forming a deeper leg down before the next major cycle began. A similar sequence now appears to be forming after a drop from roughly $3,500.

Ethereum Price Structure Mirrors The 2022 Bear Market Pattern

Recent price action shows a strong bounce, with ETH gaining close to 40% from its February lows. That move has pushed the asset toward a descending trend line and a visible resistance zone that has already rejected price before.

The key concern lies in the structure of this recovery. The move upward does not show a clean trend with consistent higher highs and higher lows. Instead, it looks more like a corrective rally inside a broader downtrend. That type of movement often appears before another decline rather than a sustained breakout.

Historical comparison strengthens that view. The 2022 cycle followed a similar path where an initial drop was followed by a relief rally. That rally gave the impression of strength but later failed, leading to another leg lower. Current conditions show a comparable sequence, with price still below major resistance and struggling to confirm a long-term bottom.

RSI And Momentum Indicators Show Weakness Under The Surface

An analyst from More Crypto Online highlighted that momentum indicators continue to signal weakness despite the price recovery. The Relative Strength Index on the higher time frame has remained below the 50 level, which often acts as a dividing line between bullish and bearish conditions.

ETH approached that level earlier in the year and faced rejection. The same situation is developing again, with the indicator nearing resistance without breaking above it. That behavior suggests that buying strength has not fully returned.

The analyst also pointed out a bearish divergence on the daily timeframe. Price formed higher highs, yet the RSI printed lower highs. That divergence usually signals fading momentum and often appears before a reversal or continuation to the downside.

Resistance Zones Could Trigger Another Ethereum Decline

Key resistance levels remain closely watched as ETH moves higher. The analyst outlined a range between roughly $2,600 and $2,950 as a possible upper target if the current bounce extends further.

Even if price reaches that zone, it would still fit within a broader corrective structure. The expectation in that case would be a rejection followed by a larger downward move, often referred to as a C wave in Elliott Wave analysis.

A projected decline from such a scenario could take ETH significantly lower again, possibly toward the $1,000 region if the pattern completes in a similar way to past cycles. That outcome depends on where the next local top forms, which remains unclear for now.

Short Trade Setup Relies On Clear Market Confirmation

The analyst explained that entering short positions too early carries risk, especially in a volatile market like crypto. A more controlled setup would require confirmation through price action.

That confirmation would begin with a clear five-wave move downward, followed by a smaller corrective bounce. Such a structure would provide a defined entry and a clear invalidation level for risk management.

This approach avoids guessing the top and instead waits for the market to show signs of weakness. Until that pattern appears, the idea of a short trade remains a possibility rather than a confirmed setup.

Weekly Indicators Show Mixed Signals With Bearish Tilt For Ethereum

A broader look at technical indicators adds another layer to the outlook. Data from Investing.com shows a mixed but slightly bearish picture on the weekly timeframe.

These readings show that most indicators lean toward a sell signal, even though a few still point to short-term strength. RSI below 50 confirms weak momentum, while MACD remaining negative supports the idea that the broader trend has not turned bullish yet.

Oscillators such as Williams %R and the Ultimate Oscillator also remain in bearish territory. At the same time, indicators like Stochastic and Bull Bear Power show that buyers are still active in certain phases of the move.

This combination creates a mixed outlook with a slight bearish tilt. Direction remains open, and the next move will depend on how ETH reacts near resistance and whether momentum can shift back above key levels.

Read Also: If Kaspa Really Beats Ethereum and Bitcoin, Why Is KAS Still Down?

Ethereum now sits at an important point where past patterns and current indicators both suggest caution. Price could still move slightly higher, yet the broader structure does not confirm a strong trend reversal.

Bitcoin’s behavior may also influence the next move, as Bitcoin continues to lead overall market sentiment. Weakness in BTC often carries over to ETH, especially during uncertain phases.

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