Ethereum Drops 38% in Three Weeks, Eyes Potential Rebound

Ethereum's price has recently shown signs of a potential rebound after experiencing a three-week decline. The cryptocurrency hit a low of approximately $1,754, marking its third consecutive losing week. This prolonged downtrend has led to a significant drop in value, with Ethereum shedding over 38% of its worth in just three weeks. The decline from last month’s peak of $2,857 to the recent low of $1,754 has been steep, but historical patterns suggest that such deep corrections often precede significant recoveries.

Historically, Ethereum has demonstrated a strong tendency to rebound after multi-week losing streaks. The last time Ethereum saw three consecutive weekly declines of this magnitude was in July 2024, followed by a 93% surge over the next three months. Current volume indicators suggest a potential shift, as declining sell-side pressure could set the stage for an upcoming relief rally. If Ethereum follows its previous pattern, a rebound toward the $3,400 level could materialize in the coming months. However, traders must watch for confirmation signals, as a failure to regain momentum could extend the current bearish trend.

Several factors could influence Ethereum's rebound prospects in the coming week. The recent launch of a new testnet, Hoodi, to rigorously test the upcoming Pectra upgrade before its mainnet deployment aims to enhance network stability. However, uncertainty surrounding the upgrade’s impact could weigh on investor sentiment. Additionally, the announcement of the Pectra upgrade triggered significant staking withdrawals, totaling approximately $500 million. If this trend of investor caution persists, it could further dampen short-term rebound prospects and limit upside momentum.

Another factor to consider is the debate surrounding Trump’s proposal to include Ethereum and other altcoins in a strategic Crypto Reserve. Skepticism about securing congressional approval to allocate treasury funds for acquiring these cryptocurrencies could introduce more volatility. Investors will be closely monitoring fresh developments on this front, as uncertainty could affect market sentiment.

Ethereum’s oversold status could attract heavy inflows in the coming week, especially if the upcoming U.S. Fed rate decision leans dovish. However, any overhang from the aforementioned bearish catalysts could stifle bullish momentum. This explains why Ethereum price has underperformed relative to rival Layer-1 assets like Ripple (XRP) and Litecoin (LTC) over the weekend. If these dynamics persist, traders can expect Ethereum to continue lagging behind the broader market, even in a bullish environment.

Ethereum price forecasts are currently showing mixed signals as the cryptocurrency remains trapped within a falling wedge pattern. The daily chart shows Ethereum price is currently trading around $1,889, hovering near the lower boundary of the wedge. Historically, falling wedges often precede bullish reversals, but confirmation is required. The key resistance level stands at $2,129, marked by the mid-Keltner Channel line. A decisive breakout above this level could propel Ethereum toward the $2,450 region, aligning with the upper boundary of the wedge and a historical resistance zone.

The MACD indicator, however, remains in negative territory, suggesting that bearish pressure still dominates. A bullish crossover in the MACD line would strengthen the case for an upward breakout. Conversely, failure to hold above the $1,806 support level could invalidate the bullish setup. Continued downward pressure may force Ethereum to revisit its recent lows, increasing the probability of further declines. Until a breakout above $2,130 materializes, Ethereum's short-term price rebound prospects remain shaky.