Analyst: ETH Still Faces Downside Risk, May Struggle to Break $2,400 in the Near Term

Odaily Planet Daily reports that CryptoQuant analyst BorisD pointed out that Ethereum still faces significant downside risks. The combination of rising exchange supply and continued ETF outflows could push prices lower to around $1,700, representing a potential correction of approximately 20% from current levels, making a breakthrough above $2,400 unlikely in the near term.

Data shows that ETH reserves on exchanges like Binance have notably increased, rising from approximately 3.36 million to 3.84 million between May 5 and May 9, indicating more tokens are flowing into trading platforms—often interpreted by the market as a sign of potential selling pressure. Meanwhile, spot Ethereum ETFs in the US have recorded net capital outflows for four consecutive trading days, totaling about $190 million, suggesting weakening institutional demand.

In terms of price, although ETH has rebounded about 40% from its recent low, it faced strong resistance near $2,400 and has since pulled back to the $2,260 level, limiting short-term upward momentum. CryptoQuant analysts noted that as exchange inflows accelerate, prices have failed to sustain the upward trend and have instead declined, indicating the market may be in a phase of "absorption and distribution."

On the technical side, ETH has broken below the lower boundary of a rising wedge pattern (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%, aligning with the macro low area from early February. Some analysts further suggest that if a larger bear flag structure continues, ETH could face the risk of dropping to $1,280.

Overall, market sentiment remains cautious, with the prevailing 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 elevated. (Cointelegraph)