Analyst: ETH still faces downside risk, likely struggling to break $2,400 in the near term
Odaily Odaily reports that CryptoQuant analyst BorisD points out that Ethereum still faces significant downside risks. The combination of rising exchange supply and continued ETF outflows could push prices lower again to around $1,700, representing a potential correction of about 20% from current levels, and it may be difficult to break through $2,400 in the near term.
Data shows that reserves of ETH on exchanges like Binance have increased notably recently, rising from approximately 3.36 million to 3.84 million between May 5 and May 9. This indicates more tokens are flowing into trading platforms, often interpreted by the market as a signal of potential selling pressure. Meanwhile, the US spot Ethereum ETF has seen net capital outflows for four consecutive trading days, totaling around $190 million, suggesting institutional demand is weakening at the margin.
In terms of price, although ETH has rebounded about 40% from its recent lows, it faced strong resistance around $2,400 and subsequently fell back to the $2,260 level, limiting short-term upward momentum. The CryptoQuant analyst noted that as exchange inflows accelerate, prices failed to sustain an upward trend and instead declined, suggesting the market may be in a phase of "absorption and distribution coexisting."
Technically, ETH has broken below the lower trendline of its ascending wedge structure (around $2,280). If this breakdown is confirmed, the pattern's measured target points to approximately $1,725, corresponding to a potential decline of about 22%, coinciding with the macro low area from early February. Some analysts further suggest that if a larger bear flag pattern continues, ETH could face the risk of declining to $1,280.
Overall, market sentiment is generally cautious, with the view that the current rebound is more likely a phase within a distribution process rather than a trend reversal signal, and short-term volatility risk remains high. (Cointelegraph)
