Ethereum Price Analysis: Bearish Outlook Tests $2.5K Support

On the daily timeframe, Ethereum (ETH) has delivered a clear bearish signal by breaking down from its previous structure and trading well below its ascending trendline. This technical failure confirms a broader negative shift in market sentiment. The recent price action was particularly telling: a rejection from a crucial supply zone in the mid-$3,000 region completed a pullback and served as a bearish continuation signal. Since that rejection, ETH has accelerated lower and is now testing a well-defined demand zone around the $2,5K area.

This $2,500 zone has historically acted as a strong base for buyers, and the current price reaction suggests some initial demand absorption is occurring. However, the overall structure remains weak. For any meaningful bullish reversal to be considered, ETH must reclaim territory above its key moving averages and the psychological $3,000 level. A daily close below this current demand zone would be a significant bearish development, opening the door for a continuation move toward lower support regions. Stabilization at this level is therefore critical to prevent further downside expansion in the crypto market.

The bearish narrative is reinforced on the 4-hour ETH/USDT chart. Here, Ethereum recently broke below a minor consolidation wedge pattern, printing another bearish signal. The subsequent move was a sharp sell-off into the $2.5K demand zone, followed by a modest reaction that notably lacks impulsive bullish follow-through. From a structural perspective, this suggests any upside movement from the current area is likely to be corrective and vulnerable to renewed selling pressure.

The most logical path for bearish continuation involves a price pullback toward nearby supply zones, which are now situated around the $2.7K and $3K regions. These levels, which previously acted as support, have flipped into resistance—a classic technical development in a downtrend. As long as the ETH price remains below these supply areas and fails to reclaim the midpoint of the broken channel, sellers retain firm control. Sustained acceptance below the lower channel boundary would further confirm downside continuation. Only a strong, decisive reclaim of this structure would begin to challenge the prevailing bearish bias.

Sentiment analysis adds a crucial layer to the technical picture. The one-month Ethereum liquidation heatmap reveals a dense liquidity pocket forming around and, importantly, below the $2.5K level. This area stands out as one of the most concentrated zones of resting leverage on the chart, representing a large cluster of stop losses and liquidation levels from overexposed long positions.

In a bearish environment, these liquidity pools become attractive targets for the market. Downside extensions can be driven not just by organic selling, but by forced liquidations that cascade as these stop-loss orders are triggered. The gradual build-up of liquidity beneath $2.5K indicates that many market participants are positioned defensively around this range, anticipating a possible break. If price action breaches this level, it could trigger a wave of liquidations, potentially accelerating the decline and pushing ETH toward the next significant support, as the analysis suggests a move to $2,000 is possible if the current demand zone fails.