Ethereum’s 45% Drop Sets Stage for Major Rebound

According to analyst StockTrader_Max’s updated Elliott Wave analysis, Ethereum has broken into its previous Wave 1 range, confirming this correction as a Wave 2 retracement rather than a Wave 4 decline. This distinction is crucial because Wave 2 pullbacks typically occur earlier in market cycles and often establish the foundation for the most powerful upward moves. StockTrader_Max noted that ETH has already reached the 0.618 Fibonacci retracement level around $2,748, a zone that frequently acts as strong support in trending markets. “ETH is already at the 0.618 FIB… this is an area where I expect to see a low form,” the analyst stated, emphasizing the technical significance of this level.

Based on this revised Elliott Wave count, the subsequent Wave 3 movement could potentially target $8,800, substantially higher than previous estimates of $6,000 for the cycle’s peak. This upward revision reflects analysts’ growing conviction that the current correction, while severe, represents a healthy retracement within a larger bullish structure. The depth of the pullback, now exceeding 45%, falls within historical norms for cryptocurrency cycles and aligns with patterns observed in previous Ethereum bull markets.

Bleeding Crypto’s analysis highlights that Ethereum has entered a broad Fibonacci support zone encompassing multiple critical levels. This area includes the 0.618 retracement at $2,748, the 0.706 level at $2,433, and the 0.786 level at $2,147. These technical boundaries align precisely with price ranges where ETH consolidated earlier this year, creating a confluence of support that has historically provided strong buying opportunities. The current drop has brought Ethereum back into this prior consolidation range, a structural pattern that has typically preceded significant upward movements in previous cycles.

Simultaneously, Ash Crypto observed that Ethereum has filled a CME gap on the daily chart that had remained open for approximately four months between $2,850 and $3,000. “Most CME gaps are filled before a big move,” Ash Crypto noted, suggesting this technical development often precedes substantial trend shifts. The completion of this gap fill, combined with ETH’s arrival at multi-level Fibonacci support, creates a compelling technical setup that could signal the formation of a market bottom.

Despite the sharp decline, the correction remains within the range of past cycle retracements, providing context for the current market behavior. If Ethereum maintains its position within this support zone, it could establish the base necessary for the next significant upward phase, according to technical analysts monitoring the situation.

Analyst Ted highlighted that Ethereum has decisively broken below the $2,800 level, touching lows around $2,650, and has now flipped this former support zone into resistance. “If ETH doesn’t reclaim the $2,800 level soon, expect a drop towards the $2,500 level,” Ted warned, emphasizing the technical importance of this price threshold. This zone gains additional significance as it represents the convergence point for realized prices across multiple wallet groups, adding fundamental weight to its technical relevance.

The market’s ability to hold within the current Fibonacci support range between $2,147 and $2,748 will be crucial for determining short-term direction. A successful defense of this area could signal the formation of a bottom and potentially trigger the beginning of the anticipated Wave 3 advance. Conversely, failure to maintain these levels would open the door to further downside toward the $2,500 region and potentially test the lower boundaries of the support zone.

Traders are closely monitoring volume patterns and market structure in the coming sessions for confirmation of either scenario. The substantial daily trading volume of $50.3 billion indicates significant market participation at these levels, suggesting institutional and retail interest in the current price range. Despite the recent 10% decline over 24 hours and 15% drop over the past week, many market participants are adjusting their outlooks upward, anticipating that this deep correction will ultimately fuel a more powerful and extended bullish cycle than previously expected.