Ethereum (ETH) has been on a steady decline, recently falling below the critical $2,000 mark, a level it hadn’t breached since November 2023. This drop has raised concerns for ETH holders, especially as it also dipped below the November 2024 lows, signaling a potential continuation of the bearish trend.

Bearish Market Structure and Price Action

Ethereum’s daily chart reveals a strong bearish market structure. The price has already broken the 23.6% Fibonacci extension at $1,944 and has since retested this level as resistance. This is a key sign that the sellers are still in control, as the price was unable to break through the $2,000 psychological barrier.

The On-Balance Volume (OBV) indicator continues to decline, suggesting that selling pressure remains elevated. The Relative Strength Index (RSI) is also below the neutral 50 mark, reinforcing the downtrend. While there has been a bullish divergence on the RSI in the past two weeks, indicating a possible short-term bounce, the overall trend remains bearish.

Short-Term Bounce Potential

Despite the continued downtrend, a short-term bounce could still be on the horizon. The $2,100 region is a potential target if Ethereum experiences a price rebound. However, this would likely be a temporary move before encountering resistance, as the broader market conditions continue to favor sellers.

The declining OBV and the inability of Ethereum to hold above key resistance levels indicate that a consolidation phase has not yet started. For a real shift in momentum to occur, Ethereum would need to form a range and see an increase in buying volume, signaling accumulation. Until then, bears are expected to maintain control.

Key Support and Liquidation Levels

Looking ahead, Ethereum’s next significant support is at $1,544, which aligns with the potential bearish targets in the coming weeks. This level is crucial, as a further decline below this point could lead to even lower price targets. Additionally, the 6-month liquidation heatmap reveals a dense cluster of liquidation levels in the $1,600 to $1,800 region, which could act as a strong support zone and potentially set the stage for a reversal.

To the north, the $2,360 and $2,872 levels are marked as strong resistance zones, but given the current market dynamics, these prices seem out of reach in the short term unless Ethereum can reverse its bearish trend.

1-Week Liquidation Heatmap and Short-Term Range Formation

The 1-week liquidation heatmap offers more insight into the short-term trend. It suggests that Ethereum could form a range between $1,840 and $1,960. This range could be pivotal for traders looking to enter short positions. If the price bounces toward $2,000 but fails to break through, it may signal a prime opportunity to go short as the downtrend is likely to resume.

Conclusion: When to Consider Going Short

While Ethereum may experience a minor bounce in the near future, the overall market conditions remain bearish. Traders should keep a close eye on the $2,000 resistance level and the $1,544 support. If Ethereum fails to break through $2,000 and shows signs of stalling, it could be a good opportunity to enter a short position. With the bearish structure intact and the potential for further declines, Ethereum’s price could continue to head south in the coming weeks.

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