TL;DR:
- The formation of a “bear flag” on the 3-day chart suggests a possible technical drop toward $1,666.
- Analysts note that Ethereum must close above $2,906 within 48 hours to avoid a breakdown.
- The ETH/BTC pair sits in a historical support zone while open interest in the derivatives market rises.
Ethereum’s struggle to maintain its key Ethereum support has kept the decentralized finance sector in a state of extreme caution. After the market’s second-largest cryptocurrency lost the psychological $3,000 barrier, the asset entered a phase of technical vulnerability that has investors on edge.
In his analysis, Trader Tardigrade highlights the identification of a “bear flag” pattern on the 3-day chart. This indicator typically precedes a continuation of a downward trend, increasing the risk of a massive liquidation in the short term.
In fact, Ethereum needs to reclaim the $2,906 level to invalidate this negative scenario. Otherwise, the technical projection based on previous movements places an alarming bearish target near the $1,666 zone.
Whale Accumulation and ETH/BTC Pair Behavior
Despite the terrifying scenario, some indicators suggest a possible price defense by large holders. Experts point out that the current range coincides with historical accumulation zones, where the realized price of whales offers the market some breathing room.
However, this thesis faces data from Ali Martinez, who reports a steady decline in large investors’ holdings since early January. Likewise, negative flows in Ethereum ETFs reinforce the view that institutional sentiment remains predominantly cautious.
On the other hand, the ETH/BTC pair is in a critical high-timeframe support area. Although it is trading below its 21-day moving average, a positive reaction at this level could allow Ethereum to gain ground against Bitcoin, easing current selling pressure.
In summary, the market is at a turning point where key Ethereum support will set the trend for the coming weeks. Daily candle closes will be under intense scrutiny to confirm whether the bear flag plays out or if buyers manage to regain control.
