Ethereum's Price Drops 2.86% Despite 72% Probability of Staying Above $2,500

Ethereum's market sentiment has seen a notable shift, with the prediction market on Polymarket indicating a 72% probability that the cryptocurrency will remain above $2,500 by May 16, 2025. This represents a 22% increase in trader confidence, driven by rising optimism and increased trading activity over recent days. The change in sentiment reflects a broader trend where traders are recalibrating their outlook based on both technical indicators and market psychology.

Despite a 2.86% drop, Ethereum has maintained critical support around the $2,500 mark. At the time of writing, Ethereum is trading at $2,554.71, marking a 2.86% daily decline. This drop follows a sharp reversal from recent highs near $2,650. The chart pattern shows a series of lower highs and lower lows, which generally points to a bearish short-term trend. However, the bigger picture may tell a different story.

Support and resistance levels are becoming more defined. Immediate resistance stands at $2,595, a level that has rejected price advances several times recently. Further resistance lies at $2,625, which was the local high before the current pullback. If bulls manage to push the price above this zone, it could mark the beginning of a short-term rally. On the downside, key support is at $2,525, where the price bounced earlier. A more critical level lies at $2,500. This zone carries both psychological weight and technical importance. A breakdown below this could open the door to further losses, potentially eroding the recent bullish sentiment.

From an indicators perspective, the RSI is currently at 72.25, which places Ethereum in overbought territory. This suggests that a short-term pullback or price consolidation is possible. Overbought conditions often precede market corrections, though they don’t always signal long-term weakness. Meanwhile, the MACD remains in bullish alignment, with the MACD line above the signal line. This crossover points to ongoing upward momentum, but declining price action may soon weaken this signal. A narrowing gap between these lines could signal a momentum shift if price support fails to hold.

In summary, Ethereum is facing resistance at $2,625 while support at $2,500 holds. The prediction market shows a high probability of Ethereum staying above $2,500, indicating strong trader confidence. However, technical indicators suggest potential short-term corrections, and the price action shows a bearish trend in the near term. Traders should monitor key support and resistance levels closely as the market continues to evolve.