Ethereum Drops 16% Amid Geopolitical Tensions

Ethereum (ETH) has experienced a notable decline in recent weeks, with its price dropping from a monthly high of $2,877 to around $2,250. This downturn is part of a broader market reaction to escalating geopolitical tensions between Israel and Iran, further complicated by the involvement of the United States. Over the past seven days, ETH has decreased by 10%, and its monthly decline now stands at 16%.

Technical analysis of Ethereum's daily chart reveals a pattern known as the "Power of 3" structure, which consists of three phases: Accumulation, Manipulation, and Distribution. From May 10 to June 9, ETH traded within a sideways range between $2,400 and $2,701, indicating an accumulation phase where market makers quietly built positions. On June 10, ETH made a sharp breakout above this range, surging to $2,879, which likely acted as a manipulation phase to lure in breakout traders before reversing. Following this, ETH experienced a swift breakdown below the range, triggering the distribution phase where smart money starts offloading into the buying pressure created by breakout traders.

If the "Power of 3" pattern continues to unfold, Ethereum could retest the next key downside target at $1,921, based on prior support zones and the measured move from the range breakdown. Traders should also monitor the 100-day moving average (MA) around $2,131, which could act as temporary support or trigger a bounce. The broader market's heavy geopolitical pressure and fragile sentiment suggest that upcoming daily candles could be highly volatile. Confirmation of a bounce or further downside will likely come through volume and how ETH behaves around the $2,131–$1,921 zone.

Ethereum's recent decline below the $2,320 support level indicates a shift in the short-term market structure. The 4-hour chart shows heavy selling pressure, while the weekly chart suggests a potential "tower top" reversal pattern, exacerbated by geopolitical tensions. Ethereum has been trading within a tight range between $2,476 and $2,681, with a consistent downtrend in exchange reserves indicating a long-term bullish signal. However, the recent breach of key support at $2,450 suggests that Ethereum could test lower levels around $2,350 if selling pressure continues.

The behavior of Ethereum whales—wallets holding between 1,000 and 10,000 ETH—has been significant. These whales have increased their holdings to a total of 14.3 million ETH, accounting for approximately 18.6% of the total circulating supply. This accumulation is generally seen as a bullish signal. However, recent selling activity by a whale, 0x31aa, who sold 5,000 ETH, has added to market uncertainty. The most immediate concern is the potential for ETH to lose support at $2,476, which could trigger a sharp drop in price and challenge the current narrative of accumulation and growth.

In conclusion, Ethereum's current status shows a market at a crossroads. Fundamentals such as new user adoption and whale accumulation paint a bullish picture, but price action remains indecisive. Until ETH breaks convincingly above $2,681, traders and investors will likely continue to wait on the sidelines. Key levels to watch closely include $2,606 and $2,681 for signs of what comes next. If momentum continues and broader market sentiment turns favorable, Ethereum could break out of its range and begin a new rally.