As of press time, Ethereum (ETH) is trading around $2,445, after experiencing a strong rally earlier this week that took ETH to a local high of $2,623. The rally created a significant technical breakout, but the market is now showing signs of a correction as sellers begin to test the newly formed support zone around $2,420.
Fibonacci Support and Weekly Trend Structure
From a weekly chart perspective, Ethereum remains above the 23.6% and 38.2% Fibonacci retracement levels — located around $2,240 and $2,424, respectively. Holding above these levels suggests that the recovery structure remains positive since the March low near $1,385.
However, to confirm a more pronounced and lasting trend reversal, Ethereum needs to surpass the 50% Fibonacci level at $2,745 — a level that is acting as strong resistance in the medium term.
“Bull Flag” Structure On 4 Hour Chart
On the 4-hour timeframe, ETH is forming a bullish flag pattern — a common continuation pattern after vertical rallies. Specifically, after rising from $2,100 to $2,600, ETH is currently correcting within a slightly descending price channel, approaching the bottom of the channel.
The key support cluster at $2,420–$2,430, which coincides with the 20-day EMA and the lower Bollinger Band, is acting as a key support. If the bulls successfully defend this zone, ETH could bounce back and head towards $2,550 and $2,600.
Technical Indicators Show a Pause
After a strong rally from May 8–11, ETH is showing signs of exhaustion on lower time frames. Indicators such as the RSI (relative strength index) on the 30-minute and 4-hour time frames are currently hovering around 43–45, reflecting neutral to slightly bearish sentiment. However, if the RSI breaks back above 50, bullish momentum could be re-ignited. The MACD histogram on the 4-hour time frame has started to flatten again, suggesting that selling pressure is temporarily waning.
Reasons Why Ethereum Price Dropped Today
The main reason for ETH's decline today is profit-taking pressure after hitting the strong resistance zone of $2,600, which was previously a high-volume cluster on the 30-minute timeframe. The $2,555–$2,600 zone is now the key resistance that needs to be overcome for ETH to continue its uptrend. Additionally, the Bollinger Bands on the 4-hour chart are starting to narrow, indicating a decreasing price volatility range, signaling a potential consolidation before a new breakout.
Short-Term Outlook: Can ETH Retrace to $2,600?
As long as ETH price remains above $2,420, the bulls still have the short-term technical advantage. If there is a breakout from the bull flag pattern, ETH is likely to revisit the $2,555 area and then $2,600.
If this zone is decisively broken, the next target will be $2,745, which corresponds to the 50% Fibonacci level. Conversely, if the $2,420 support is lost, ETH could correct further towards the $2,300 zone, and even the EMA50 zone around $2,246.
Investors and traders should watch the resistance area around $2,460–$2,480, combined with trading volume to confirm a breakout. If the bullish momentum fails, ETH may need to retest the 100-day EMA around $2,071 before recovering.
Ethereum Price Forecast Table
