Ethereum Drops 40% From Peak, Tests Key Support at $2,250

Ethereum, the second-largest cryptocurrency by market capitalization, is currently at a critical technical juncture. After reaching a peak near $3,800 in May 2025, the price of Ethereum has been on a steady decline and is now hovering around $2,260. With increasing bearish sentiment and key support levels being tested, traders are speculating whether Ethereum will see a price rebound soon or if a deeper drop is imminent. The next few days could be pivotal for Ethereum's medium-term direction.

Ethereum is currently trading at $2,262, showing a slight recovery after hitting a low of $2,223 on the daily chart. The price has been in a clear downtrend since reaching a local high near $3,800 in early June. This correction follows a strong rally in May and appears to be driven by broader market weakness, fears of ETF outflows, and Bitcoin's recent dip below $62,000.

The chart, which uses Heikin Ashi candles to smooth out price action, shows consistent red candles with little to no upper wicks over the past several days, indicating bearish momentum. Multiple horizontal support levels are drawn between $2,200, $2,000, and $1,700. These levels are former accumulation zones and Fibonacci retracement levels from the March–May rally. Ethereum is currently testing the 0.618 Fibonacci level, which sits around $2,250—a historically strong support zone.

The Relative Strength Index (RSI) is currently at 34.98, dipping into oversold territory (below 40). Historically, such low RSI levels often signal a potential bounce. However, the downward-sloping RSI trendline suggests that momentum remains bearish, and there is no clear bullish divergence yet. If the RSI bounces and breaks above 40 while Ethereum holds above $2,250, it may trigger a short-term relief rally back toward $2,500–$2,600.

Immediate resistance levels are at $2,300 and $2,480, while immediate support is at $2,200. Key support zones are at $2,000 and $1,700. If panic selling continues, Ethereum could revisit $1,450–$1,500, which coincides with the 0.786 retracement of the earlier rally. Taking the last swing high of $3,840 and the swing low of $2,223, the 0.618 Fibonacci retracement is at $2,270 (already being tested), the 0.786 Fibonacci is at $1,750, and a full retracement could see Ethereum drop to $1,600–$1,450. If the market does not hold the $2,200–$2,250 zone, Ethereum could drop another 22% from its current level.

A reversal is possible only if Ethereum's daily candle closes above $2,300 and the RSI starts trending upward. Currently, sellers are in control, but the market is nearing exhaustion levels. A bullish engulfing candle with rising RSI would be a reliable signal of a short-term reversal. Ethereum is in a vulnerable technical position. The support at $2,200 is critical. A breakdown below this level could trigger a sharp decline, while a strong bounce could push Ethereum back toward $2,500. Traders should monitor RSI recovery, volume spikes, and Bitcoin's next move before taking any positions. Ethereum's next 3–5 days could define its trajectory for the third quarter.