Ethereum Drops Below $2,000, Bearish Pressure Persists

Ethereum has been experiencing significant bearish pressure, with its price falling below the $2,000 psychological level, a mark last tested in November 2023. This decline has raised concerns among holders, as the ETH/BTC pair reached a low not seen since December 2020. The technical indicators suggest that the downtrend has not eased into a consolidation phase, with bearish targets to the south highlighted.

The daily chart reveals a firmly bearish market structure, with the 23.6% southward Fibonacci extension level at $1,944 having been broken and retested as resistance. The On-Balance Volume (OBV) continues to decline, indicating heightened selling pressure, while the Relative Strength Index (RSI) remains below the neutral 50 mark. However, over the past two weeks, a bullish divergence has formed on the RSI, suggesting the potential for a price bounce. If a bounce occurs, the $2,100 area could serve as a short-term target before encountering resistance.

The declining OBV and price trend indicate that a consolidation phase has not yet begun. A range formation, accompanied by a rising OBV, would signal accumulation, but Ethereum bears still hold control. As a result, Ethereum is likely to continue its downtrend in the coming weeks, with the next support level at $1,544. The 6-month liquidation heatmap showed that the $1.6k-$1.8k region was filled with a dense cluster of liquidation levels, making it a good price target and also a prime candidate for a bullish reversal. To the north, a strong magnetic zone was spotted at $2,872 and a less intense one at $2,360.

To gauge the short-term trends, the 1-week liquidation heatmap was analyzed. It showed that a potential short-term range formation between $1,840 and $1,960. Hence, traders need to be on their toes if the price bounce appears to stall near the $2k mark. The current price of $1,940 is close to the upper end of this range, indicating that traders may be cautious about entering short positions until there is a clear break below the support level of $1,840.

Despite the bearish sentiment, some analysts believe that Ethereum's current price represents a solid buy opportunity. The leading altcoin's future should not be speculated on based on its recent weakness, as it is likely to rebound to the $2,200 level, where it would face resistance. The current long/short ratio aligns with this bullish sentiment, as a majority of traders are positioning for an upward move. However, the key Ethereum price prediction for 2025 suggests that unless ETH can regain market dominance, it may struggle to outperform its peers. This indicates that Ethereum's future performance will depend on its ability to regain market dominance and overcome the current bearish pressure. Traders should closely monitor the price action and be prepared to adjust their positions accordingly.