Ethereum continues its recent downward trend, approaching the $2,000 level. On the surface, it seems like the decline is stabilizing, but on-chain data may indicate that the bearish trend has not yet ended.
Ether (ETH) is trading near key levels, but the underlying indicators suggest that stress continues. There is a possibility that this decline may proceed similarly to past decline cycles.
Ethereum, will history repeat itself
Ethereum dropped below the realized price at the end of January. Since then, ETH has remained below this important on-chain benchmark. The realized price reflects the average purchase price of all coins in circulation. Trading below this price means that there are unrealized losses overall.
The MVRV (Market Value to Realized Value) metric also confirms this pressure. ETH's MVRV remains below 1.0, indicating that the average holder is in a loss position. Periods spent in this range have typically been accompanied by significant market corrections.
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In past cycles, prices remained below the realized price for an extended period before recovery followed. However, these recoveries mostly occurred after panic selling. In previous bear markets, ETH established a solid bottom only after experiencing additional declines. The current situation also suggests that further declines could occur before stabilization.
Ethereum selling is active.
Exchange on-balance data shows that the supply entering exchanges is increasing. Approximately 445,000 ETH has moved to exchanges in the past week. At current prices, this corresponds to over $887 million in selling pressure.
An increase in exchange balances generally indicates distribution. ETH investors typically move assets to exchanges for the purpose of selling. Recent large inflows suggest that investors are responding more sensitively to risks.
If prices do not bounce back quickly, panic selling could intensify. In the past, sharp price declines followed periods of rapid exchange deposits. The combination of realized losses and increased supply heightens the possibility of further declines.
Potential for further decline in Ethereum price.
Ethereum is trading at $1,997 as of the time of writing. The $2,000 range is a psychologically very important support level. While short-term buying pressure may enter this range, the potential for a medium to long-term rebound is decreasing due to continued selling pressure. Based on the CBD heatmap, $1,866 is acting as the next major support level.
This range has been an area of past accumulation activity. If ETH loses $1,866, downside risk could expand to $1,385. This price level acted as a structural bottom in the previous cycle. A drop to $1,385 would correspond to about a 30% decrease from the current level. The next major support level below that is located near $1,231.
Conversely, if investor behavior changes, price movements may shift. If holders reduce deposits to exchanges and enter a reaccumulation phase, ETH could find stability above $2,000. In the short term, there is a possibility of rising to $2,205 upon a rebound. If buying pressure continues, there could be additional increases to $2,500, which may lead the current bearish outlook to a price reversal.