Ethereum Price Faces Potential Breakdown Amid Bearish Market Signals

Ethereum (ETH) price trends indicate a potential breakdown after failing to maintain key technical support levels, including a declining $1,620 threshold. A rising wedge pattern suggests further price drops are likely, with key support at $1,580 under threat. Increased movements to exchanges and declining market dominance add to bearish market sentiment, suggesting further declines if support levels are breached.

Ethereum (ETH) has recently shown possible signs of a breakdown after failing to maintain essential technical support levels. Despite a rising triangle pattern present in the hourly chart, which suggested bullish momentum, the price fell beneath the lower trendline, indicating a potential downward trend amid increased reserve growth and market instability, leading to bearish sentiment among traders.

The appearance of a rising wedge pattern on the hourly timeframe typically points to anticipated price drops. The strength of the $1,620 price area has weakened significantly, with ETH dropping to $1,602. The recent movement below the 100-hour simple moving average indicates lower buyer interest, alongside failed resistance break attempts at $1,640 and $1,680. Dwindling market volume further substantiates these negative trends.

Ethereum is currently hovering around the 50% Fibonacci retracement level of $1,580, following a recent price fluctuation between $1,472 and $1,690. Should ETH fail to maintain this support level, potential further declines towards $1,550 or even lower seem likely. The cryptocurrency also trades below its 200-day and 50-day moving averages, which serve as significant resistance, particularly near the $1,950 mark, indicating sustained bearish control that complicates short-term recoveries.

Recent on-chain data highlights an upward trend in Ethereum being transferred to centralised exchanges, with over 368,000 ETH moved since early April. This influx has raised total exchange reserves to approximately 18.95 million ETH, reversing a prior decline. Such movements often suggest holders are preparing for selling or trading. The recent price pullback correlates with increased reserves, indicating potential short-term market sell-offs, often reflective of investor trepidation.

As selling continues, Ethereum is testing vital support levels, particularly at $1,580, which coincides with a key Fibonacci retracement. A breakdown below this could facilitate declines to $1,550 or potentially $1,450, depending on the selling pressure. Additionally, bearish characteristics on broader timeframes suggest this downward trend may persist. A significant barrier lies at $1,950, which ETH has struggled to breach, while declines in market dominance highlight weakening market conditions, with levels not seen since 2019-2020.

Analysts, including Rekt Capital, emphasise the necessity for Ethereum to secure essential support to regain market strength; otherwise, continued weakness could be anticipated.