Ethereum’s (ETH) price has hit a critical point as it drops below a long-established multi-year trendline. The price movement has fueled concerns about a deeper correction, with growing speculation on whether Ethereum can regain its footing or if a prolonged downtrend is imminent.

This latest dip comes in the wake of U.S. President Donald Trump’s declaration regarding a national crypto reserve. The statement initially excluded Ethereum, naming other cryptocurrencies like XRP, SOL, and ADA as part of the reserve. This caused immediate market uncertainty. Although Trump later acknowledged that BTC and ETH would be included, the initial omission added fuel to the bearish sentiment surrounding Ethereum’s price.

Ethereum’s Bearish Breakdown

Technical analysts are now debating whether Ethereum has truly broken below a multi-year ascending triangle pattern, which had typically signaled bullish behavior. Ascending triangles often indicate a period of accumulation before an upward breakout. However, Ethereum’s recent price action contradicts this pattern, as it broke below the lower trendline, suggesting a possible bearish scenario.

This unexpected breakdown raises concerns about the future direction of Ethereum’s price. Historically, when Ethereum has faced a similar trend, the price often rebounded. But now, with ETH’s failure to hold above key support levels, many analysts worry that this could lead to a more significant correction.

The downside targets, if the breakdown is confirmed, could be much lower than expected. The real question now is whether Ethereum can reclaim its previous support levels or if it will enter a prolonged downtrend, testing the strength of investor confidence.

The Trump Factor and Market Sentiment

Trump’s initial omission of Ethereum from the U.S. Crypto Reserve sparked considerable anxiety within the market. While he later clarified that Ethereum would indeed play a key role in the reserve, the timing of the statement coincided with ETH breaking below its key trendline, increasing the pressure on Ethereum’s price.

The uncertainty surrounding Ethereum’s role in U.S. crypto policy only added to the volatility. Ethereum’s price had already shown signs of weakness prior to Trump’s declaration, but the market’s reaction suggests that his initial exclusion of ETH contributed to the accelerated selloff.

In addition to the policy uncertainty, market sentiment has been shifting towards Bitcoin (BTC). Bitcoin dominance has been on the rise, reflecting a shift in investor preference back to BTC, which is often seen as a safe haven in times of uncertainty. As capital flows back into Bitcoin, altcoins like Ethereum face additional downward pressure, further hindering the recovery of ETH.

Key Levels and Technical Indicators

As Ethereum continues to struggle, the key levels to monitor are the broken trendline and the ability of ETH to reclaim support. If Ethereum can regain this level, it may signal a potential recovery. However, if the price stays below the trendline, it could confirm a deeper correction and reinforce the bearish outlook.

At present, Ethereum is firmly below both its 50-day and 200-day moving averages, indicating weak momentum. The Relative Strength Index (RSI) is hovering near oversold territory, signaling that the market sentiment is currently bearish. Additionally, the Moving Average Convergence Divergence (MACD) indicator remains in negative territory, further emphasizing the downward pressure on ETH.

Ethereum’s Next Move: A Possible Rebound?

While Ethereum’s technical structure points to a possible continuation of its decline, there may still be hope for a rebound. The White House’s upcoming Crypto Summit could provide a fresh perspective on Ethereum’s role in the future of U.S. crypto policy. If discussions at the summit favor Ethereum, it could reinvigorate investor confidence and lead to a short-term price recovery.

For now, Ethereum’s immediate future hinges on its ability to recover above its broken trendline. If ETH manages to reclaim this level, it could invalidate the bearish breakdown and set the stage for a reversal. However, if Ethereum remains below this critical support, the likelihood of a deeper correction increases.

Investors and traders should keep a close eye on Ethereum’s next moves, as the current technical indicators and market conditions suggest that Ethereum is at a crossroads. Will it rebound, or is the bearish phase just beginning? Time will tell.

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