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On Tuesday, Ethereum (ETH) retested the $2,000 support zone, falling below this level for the first time in over a year. Some analysts suggested the second-largest crypto risks a 40% correction as its price attempts to hold its support level “between heaven and hell.”
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Monday Dump Sends Ethereum To 15-Month Low
Ethereum has fallen to a yearly low of $1,993, according to Binance market data. The cryptocurrency has dropped below $2,000 for the first time in 15 months, hitting its lowest price since late November 2023.
Amid the February market retraces, ETH failed to hold the $3,000 level, hovering between the $2,500 and $2,8’00 price range for most of the month, despite the February 3 market crash to $2,100.
However, the end-of-month correction saw Ethereum bleed 17% to a new low of $2,076. Per Coinglass Data, the King of Altcoins closed last month with a 31.95% decline, registering its first February Close with red numbers since 2018.
ETH recovered 17% on Sunday, attempting to reclaim the $2,500 resistance level after US President Donald Trump announced the establishment of a “Crypto Strategic Reserve,” which will have Bitcoin and Ethereum “at the heart” of it.
On Monday, ETH fell below the $2,000 mark during the market’s dump and risks dropping another 40%. Ali Martinez highlighted that Ethereum could fall as low as $1,250 if it doesn’t reclaim some key levels.
The analyst noted that Ethereum has been consolidating in a parallel channel since 2024, bouncing from the channel’s upper boundary to the middle or lower boundary before bouncing back to the upper zone.
Nonetheless, ETH broke below the channel’s lower boundary after dipping below $2,200 last week. If the cryptocurrency doesn’t reclaim the channel’s lower boundary, its price could retrace to the $1,600 or even $1,250 support zones.
Martinez noted that Ethereum’s most critical resistance barrier is at the $2,400 mark, where over 2.41 million investors bought 62,68 million ETH. To the analyst, a breakout above this level could “clear the path for a rally toward $3,000.”
ETH Following Bear Market Years’ Playbook?
As Ethereum retested the barrier “between heaven and hell,” some market watchers pointed out that ETH’s recent performance resembles its 2018 and 2022 price action.
According to the pseudonym trader 5.0 Inverted, the king of altcoins is “following 2018 and 2022 bear market price action.” The chart shows that ETH steadily declined throughout those years, retracing 82,71% and 68.29% in 2018 and 2022, respectively.
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The cryptocurrency saw small price rallies in the first six months of both years but continued the downtrend. ETH has declined 36.4% year-to-date (YTD), showing a similar performance to the mentioned years.
Another trader suggested that Ethereum dropped 60% from $4,200 to $1,800 last cycle before pumping 170% to its $4,800 all-time high (ATH) in the coming months. Based on 2021’s playbook, the cryptocurrency might continue its negative performance before recovering at the end of the year.
At the time of writing, ETH has recovered nearly 7% from its drop below $2,000 and trades at $2,135.
Featured Image from Unsplash.com, Chart from TradingView.com
