Analyst: ETH Still Faces Downside Risk, May Struggle to Break $2,400 in the Near Term
Odaily Planet Daily News CryptoQuant analyst BorisD pointed out that Ethereum still faces significant downside risks. The combination of rising exchange supply and continuous outflows from ETF funds could push prices lower again to around $1,700, representing a potential correction of about 20% from current levels, and it may struggle to break through $2,400 in the near term.
Data shows that ETH reserves on exchanges like Binance have increased significantly recently, rising from approximately 3.36 million to 3.84 million between May 5 and May 9, indicating more tokens are flowing into trading platforms, which is often interpreted by the market as a signal of potential selling pressure. Meanwhile, the U.S. spot Ethereum ETF has seen net capital outflows for four consecutive trading days, totaling approximately $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 before falling back to the $2,260 range, limiting short-term upward momentum. CryptoQuant analysts noted that as exchange inflows accelerate, the price has failed to sustain its upward trend and has instead declined, indicating the market may be in a phase of "absorption and distribution coexisting."
On the technical side, ETH has broken below the lower trendline of an ascending wedge structure (around $2,280). If this breakdown is confirmed, the pattern's measured target points to around $1,725, corresponding to a potential decline of approximately 22%, which also coincides 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 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)
