Ethereum price was stuck below the important support of $2,000 today, February 16, as it erased the gains made during the weekend.
Summary
- Ethereum price may be at risk of falling to the key support at $1,500.
- It has formed a bearish pennant pattern on the daily timeframe chart.
- The bearish catalysts have outweighed the bullish one.
Ethereum (ETH) token was trading at $1,980, down substantially from its all-time high of $4,960. Technical analysis suggests the coin will likely drop to the key support at $1,500 before hitting the psychological $2,500 level.
Ethereum price technical analysis suggests a retreat to $1,500 is likely
The daily timeframe chart shows that ETH price remains in a technical bear market after falling by 60% from its all-time high. It is slowly forming a bearish pennant pattern, consisting of a vertical line and a symmetrical triangle.
It has completed forming the flagpole line and is now in the triangle section, whose two lines are about to converge. In most cases, a bearish breakout normally happens when these two lines are about to meet.
ETH price has remained below all moving averages and the 78.6% Fibonacci Retracement level. It has also moved below the strong pivot, reverse level of the Murrey Math Lines.
Therefore, the most likely ETH price prediction is bearish, with the initial target at the psychological $1,500 level, a few points above its lowest level in April last year.
The bearish outlook is also supported by a Polymarket poll, which places the odds of it falling to $1,500 this year at 72%.
ETH price to drop as demand wanes
The main reason why ETH price may crash to $1,500 first is that demand has remained thin in the past few months. A good example of the waning demand is the ongoing happenings in the futures market, where open interest has dropped to $23 billion, its lowest level since 2024. It has crashed from last year’s high of nearly $70 billion.
Spot Ethereum ETF outflows have continued this month. These funds have shed over $326 million in assets this month, the fourth consecutive month in the red. They have lost over $2 billion in assets in the last four months.
These bearish catalysts have outweighed the positive Ethereum news. For example, the staking queue has jumped to a record high, with the staking ratio hitting the key milestone of 30%.
The supply of ETH on exchanges has dropped to a record low, while transactions, fees, and active addresses have soared. Ethereum has also become the most preferred chain for the booming real-world asset tokenization industry.