Ether Faces 25% Decline Risk Amid Bearish Signals

Ether’s (ETH) price chart has exhibited a “Power of 3” setup, with a price target exceeding $5,000. This pattern, also known as the “AMD” model, which stands for Accumulation, Manipulation, and Distribution, provides a framework for understanding institutional investor trading strategies around key liquidity zones. The accumulation phase, characterized by quiet sideways price action, occurred between May 9 and June 20. During this period, market participants built positions while volatility remained low, setting the stage for larger price movements.

Following the accumulation phase, a manipulation phase ensued, marked by a brief breakdown below $2,200. This phase aims to trigger retail investor panic and force premature selling or short entries, only to reverse violently against the expected move. As ETH rebounded to $2,500 from $2,200, institutional investor demand surged. Data noted that spot ETH ETFs recorded 106,000 ETH in net inflows last week, marking the seventh consecutive week of positive flows. This significant capital movement further validates the setup’s transition into its final stage.

The distribution phase is now underway, where ETH begins moving aggressively in the opposite direction of the manipulation zone. Liquidity pools above become targets, and price often accelerates as trapped positions are unwound. In the current market, Ether's distribution phase target lies above $5,000, indicating a potential 100% rally. This pattern mirrors Ether’s 2016–2017 rally, suggesting that ETH could be on the verge of its “most hated rally,” a surge few expect, but one driven by institutional investors and long-term market structure.

However, a bearish outlook could also be emerging. Ether faces a potential 25% decline toward $1,600 after failing to break a long-standing technical resistance and slipping below the lower boundary of a multi-year symmetrical triangle on the two-week chart. A massive ETH whale moved approximately $237 million worth of Ether from staking to exchanges, with over 62,000 ETH already entering exchanges over five days. This wave of redistribution from large holders into mid-tier wallets suggests mounting selling pressure and downside risk for ETH.

Crypto trader exitpump also noted that Ether is struggling to break the $2,500 resistance level, with the current market shorting the altcoin. The chart shows that aggregated open interest rose during the trading session, even as ETH prices declined. Meanwhile, short-term funding rates turned negative and spot volume decreased, signaling growing bearish pressure. With immediate liquidity now concentrated below the current range, the key downside targets lie between $2,350 and $2,275.