Ethereum Drops 15% Amid Middle East Tensions, Key Levels Tested

Ethereum is currently at a critical juncture following significant market volatility triggered by renewed conflict in the Middle East. After briefly surpassing the $2,800 resistance level earlier this week, the price of Ethereum (ETH) retreated sharply, indicating uncertainty among market participants. This retracement coincides with escalating macroeconomic and geopolitical tensions, particularly after Israel’s strike on Iran, which has led to a widespread risk-off sentiment across global assets. Despite these challenges, Ethereum remains near important technical zones, maintaining the potential for substantial movement in either direction.

Top analyst Big Cheds noted a significant technical pattern: Ethereum is forming a small-bodied candle with an upper shadow on the weekly chart. This pattern suggests indecision and potential weakness at the top, although the structure is not yet fully compromised. The next few daily candles will be crucial in determining Ethereum’s short-term trend. Bulls need to reclaim the $2,800 level with conviction to reestablish momentum, while further downside could lead to a deeper correction toward previous consolidation zones.

Ethereum has lost over 15% since last Wednesday, retracing from local highs near $2,830 and falling back into the trading range that has held since early May. Despite this drop, Ethereum remains structurally intact, still respecting the broader consolidation zone. However, price action continues to stall below the $2,770 resistance, keeping traders and analysts divided on the next move. Some market participants believe Ethereum could ignite the next altcoin season if it manages to break above its current range with conviction. A decisive close above $2,800 could reestablish bullish momentum and signal capital rotation from Bitcoin into ETH and broader altcoins. Others remain cautious, pointing to weakening momentum, global instability, and a failure to sustain support as early warning signs of a potential breakdown below the $2,500–$2,550 area.

Adding to the analysis, Cheds shared a technical perspective showing that Ethereum’s weekly chart is printing yet another small-bodied candle with an upper shadow. This structure is consistent with what he sees as a “pre-tower top” setup—a pattern that often precedes heightened volatility or a reversal. It highlights the market’s current hesitation and the ongoing battle between buyers and sellers. Macroeconomic conditions are not helping either. Rising US Treasury yields continue to pressure risk assets, while ongoing geopolitical turmoil—especially the escalating conflict between Israel and Iran—adds another layer of volatility and fear across financial markets.

Ethereum is trading at a critical juncture after failing to hold the breakout above the $2,770 level. The chart shows ETH slipping back into its prior range, with price now testing support around $2,530 after a sharp intraday decline. This move follows a failed breakout attempt, as the price was rejected near the 200-day moving average, currently acting as dynamic resistance just below $2,650. The volume spike on the recent sell-off confirms strong bearish interest, increasing downside pressure. ETH is now sitting close to the lower end of a trading range that has persisted since early May. A decisive break below $2,500 could open the door for a drop toward the 50-day moving average near $2,380. This would put Ethereum on a path to retest earlier consolidation levels.

On the upside, bulls must reclaim the $2,650–$2,770 resistance zone and establish a higher low to revive bullish momentum. Failing to do so will likely keep Ethereum range-bound or push it lower amid ongoing macroeconomic and geopolitical uncertainty. The next few days will be pivotal in determining whether Ethereum can regain its bullish momentum or if it will continue to face downside pressure.