Ethereum Price at Risk: Small Dip Could Trigger 40% Decline

The recent surge in Ethereum prices surpassing $2,500 hints at a potential strong upward trend with expectations of hitting $3,000. Market sentiment has been largely optimistic about a significant increase. However, the continuous upward momentum is currently uncertain as Ethereum, the second-largest token, is facing challenges in sustaining the rally. Despite the Bulls’ efforts to maintain the pace, any weakening in their position could trigger a substantial pullback.

The question arises: will Ethereum’s price dip below $2,000 once again? The impact of the spot ETH ETF on the rally seems limited, with indications of struggle. Since their introduction, the ETFs have experienced negative total net flows, largely attributed to the Grayscale Ethereum Trust losing value. This trend suggests a potential shift of funds from Ethereum to other alternative coins. The ETH price finds itself in a precarious position, facing a looming 40% decline following a 50% drop from its March highs.

Trading within an ascending triangle, the ETH price is on the verge of breaking the lower support level, indicating a weakening stance from the bulls. The Relative Strength Index (RSI) has been unable to surpass the ascending trend line, facing rejection in each attempt. A breakthrough above the critical resistance level at $2,682 could negate the bearish outlook; otherwise, a drop below $2,300 might be imminent.

Despite the challenges, some positive developments are emerging in the market. Lower Ethereum prices could attract new participants to enter the space. Once the price hits bottom, a strong bullish opportunity may arise. If Bitcoin maintains a sideways trend, other altcoins may flourish, but a drop in the ETH price could go unnoticed. Therefore, Ethereum’s price, currently at a critical juncture, is anticipated to hold the key support level, recover above $2,800, and potentially reach $3,000.