Ethereum Bounces — But Is a 20% Trap Forming Beneath One Critical Level?
Ethereum is bouncing, but remains within a fragile head and shoulders pattern, risking a 20% drop if the critical $2,880 neckline fails.Summary
Ethereum price is currently rebounding, but the underlying structure remains fragile as it trades within a daily head and shoulders pattern, with the right shoulder formed on January 6.
On-chain metrics show mixed signals: short-term holder profit-taking risk is easing as many have already exited, reducing immediate selling pressure. Conversely, the bounce is not driven by aggressive new speculative demand. However, support is present due to consistent dip buying, evidenced by a bullish divergence in the Money Flow Index (MFI), and steady accumulation by mid-to-long-term holders.
The critical decision point is the $2,880 neckline of the bearish pattern; a daily close below this level would activate the pattern, potentially leading to a 20% decline. Key resistance lies between $3,090 and $3,110, an on-chain cost-basis cluster. Sustained strength above $3,300 is needed to strengthen the bounce, while a move past $3,440 would fully invalidate the bearish structure.
(Source：BeInCrypto)