Ethereum’s Price is Up, But This Analyst Still Sees Trouble Ahead

Ethereum risks deeper losses if selling pressure pushes price below key support zones.
On-chain data hints at possible accumulation near $1,886, offering temporary support.
Fear-driven selling by long-term holders could create prime accumulation opportunities.

Ethereum has cracked below a key support level of $2,200, reinforcing the bearish mood and triggering warnings of a potential drop to $1,250.

Ali Martinez, a well-known analyst, highlights that Ethereum’s breakdown from a parallel channel signals a potential decline to $1,250 if downward momentum persists.

Following Ethereum’s fall to $1,840, analysts have identified crucial support zones at $1,640 and $1,250. If the selling pressure doesn’t let up, ETH could plummet further toward that $1,250 target, a level that aligns with historical support and Fibonacci retracement levels.

Is There a Price Floor in Sight?

According to Glassnode, Ethereum’s Cost Basis Distribution (CBD) has increased from 1.6 million to 1.9 million ETH at the $1,886 level. This rise in supply at a specific price point suggests potential accumulation by investors.

Adding to the mixed signals, a custom Capitulation Metric, which integrates CBD and Realized Loss data, highlights growing capitulation pressure in the market. These indicators suggest that ETH could find temporary support around $1,886 before deciding its next move.

Buying Opportunity for Long-Term Holders

Ali Martinez also points to the Ethereum Long-Term Holder Net Unrealized Profit/Loss (NUPL) metric, which is now in the fear zone. This reflects long-term investors dumping their holdings as ETH declines below $2,000.

Historically, such fear-driven sell-offs have created prime accumulation opportunities. When investor sentiment shifts, Ethereum could experience a strong rebound, mirroring past recovery patterns. The question is: will enough buyers step in to stop the bleeding?

Technical Indicators Confirm Bearish Trend

As of press time, the price currently sits at $1,930.19, a 3.08% recovery in the past 24 hours but an overall 11.82% decline over the past week.

The Relative Strength Index (RSI) is at 35.68, indicating that ETH is approaching oversold conditions. This suggests potential buying interest at lower levels, but without a reclaim of lost support zones, short-term upside remains limited.

Ethereum’s MACD (Moving Average Convergence Divergence) remains in negative territory. The MACD line sits at -209.5, below the signal line at -195.4, confirming the ongoing bearish momentum. A positive shift in these indicators would be necessary for any reversal. Until then, traders should watch for reactions at those key support levels – $1,640 and $1,250.

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