Ethereum Drops 5% to $2,270.86 Amid Middle East Tensions

Ethereum (ETH) experienced a significant decline following the escalation of tensions in the Middle East. The United States conducted precision strikes on Iran’s nuclear sites, including Fordow, Natanz, and Isfahan, prompting Iran to retaliate with missile attacks and threats of further conflict. This geopolitical turmoil led to a 5% drop in ETH's price, bringing it down to $2,270.86, and a 6.4% decrease over a 24-hour period. The market cap of ETH stands at $274 billion, with 120.7 million ETH in circulation.

From a technical standpoint, the Ethereum price prediction appears bearish. The price has been forming lower highs, capped by a descending trendline from the $2,900 high. This trendline has rejected all bullish attempts, indicating bearish control. The break below the $2,378 horizontal support level, which had previously acted as a floor, is particularly noteworthy. This level has now become resistance, and the three black crows candlestick pattern suggests further selling pressure. Additionally, ETH is below the 50-period Exponential Moving Average (EMA) at $2,493, confirming the bearish setup. The Moving Average Convergence Divergence (MACD) shows a widening gap between the MACD and signal lines, with a declining histogram, further supporting the bearish outlook.

For traders, the key level to watch is $2,378, which has now become resistance. A bearish retest of this level, especially with bearish candlesticks like a spinning top or bearish engulfing pattern, could present a low-risk short setup. The entry range for this trade would be $2,370–$2,378 on a confirmed rejection, with a stop-loss above $2,400 to avoid false breakouts. The first target is $2,114, a strong historical support zone, and the second target is $2,036, a deeper demand level last tested in April. Traders should also watch for Relative Strength Index (RSI) divergence or reversal candles at $2,114 to determine if the downtrend is exhausted. In summary, the recent sell-off is a mix of geopolitical and technical factors.

Until ETH reclaims the 50 EMA and breaks above the trendline, the path of least resistance is down. Traders should exercise caution and wait for confirmation at key levels before entering any positions. The current market conditions highlight the importance of staying informed about both geopolitical developments and technical indicators to make well-informed trading decisions.