Ethereum Drops 2% as Bearish Momentum Builds

Ethereum's price has experienced a notable pullback, retreating from the $2,600 mark to the $2,550–$2,560 zone. This downward movement was triggered by a rejection at the $2,610 supply zone, leading to a breakdown below a rising short-term trendline. At the time of writing, Ethereum is trading near $2,560, showing a mild intraday loss. Short-term indicators suggest waning momentum and rising volatility.

The 4-hour chart reveals that Ethereum's price action broke out above a multi-week consolidation range near $2,520 but faced rejection near the $2,610–$2,620 resistance band. This resistance zone has capped Ethereum's upside three times since mid-June, reinforcing its significance as a key supply area. The breach of the rising trendline support from the late June lows has shifted the short-term structure to bearish.

On the daily timeframe, Ethereum remains trapped within a large symmetrical triangle pattern, with the apex drawing closer. The lower support of this triangle currently aligns with the $2,420–$2,440 zone, which could serve as the next potential bounce area if the current weakness persists.

The downward trend in Ethereum's price can be attributed to multiple bearish technical and sentiment cues. On the 30-minute chart, a clear breakdown below the blue support channel around $2,570 has opened space for further losses. The MACD is in negative territory, indicating fading bullish momentum, while the RSI is at 35.6 with multiple bearish divergence signals confirmed on July 3.

VWAP analysis shows that Ethereum has slipped below the session average of $2,576, indicating short-term price weakness. On the DMI, the -DI line is dominant, and the ADX is rising, confirming a strengthening bearish trend. The derivatives dashboard shows a 20.60% drop in volume and a 2.24% decline in open interest, reflecting reduced market conviction. Short liquidations in the past 4 hours were minimal compared to long liquidations, implying that sellers are still in control. Funding rates remain barely positive, suggesting a slight long leverage skew, which may invite more downside if sentiment worsens.

Bollinger Bands on the 4-hour chart are starting to widen after compression, signaling increasing Ethereum price volatility. Ethereum has now closed a 4-hour candle below the mid-band ($2,560), suggesting downward pressure could continue toward the lower band near $2,515. The EMA cluster offers mixed signals, with Ethereum holding just above the 20 and 50 EMA near $2,534 and $2,491, respectively, but starting to drift below the 100 EMA ($2,482). If the price continues closing below the 100 EMA, momentum may shift decisively in favor of the bears.

On-chain data remains neutral. Despite a positive funding rate of 0.0038% and a long/short ratio favoring longs (Binance accounts at 1.34), the lack of bullish follow-through at $2,610 suggests traders are cautious.

If Ethereum fails to reclaim $2,570 quickly, the next support lies at $2,515 (lower Bollinger Band and horizontal support). Below that, the $2,440–$2,460 demand zone aligns with trendline and Fibonacci confluence, offering a likely bounce area. On the upside, a reclaim of $2,580 could invalidate the breakdown, with resistance again at $2,610 and then $2,645. For bulls to regain control, Ethereum needs to reclaim the VWAP mid-zone and break above the descending resistance from the June highs. With RSI and MACD turning bearish and volume thinning, traders should watch for any spikes in selling pressure or sudden liquidation-driven wicks.