Ethereum (ETH) Price Shows Signs of a Possible Breakdown After Failing to Hold Key Technical Levels.

Ethereum (ETH) price showed signs of a possible breakdown after failing to hold key technical levels.

The price of Ethereum (ETH) showed signs of a possible breakdown as it failed to clear key technical levels and a rising wedge pattern emerged on the hourly chart of the cryptocurrency.

A breakdown of the cryptocurrency’s technicals, exchange activity and what traders can expect in the days ahead.

What happened: The price of ETH showed signs of a possible breakdown as it failed to clear key technical levels and a rising wedge pattern emerged on the hourly chart of the cryptocurrency.

The price of Ethereum remained above the lower boundary of a rising wedge pattern, which formed on the4-hour chart. A move above the upper boundary of the pattern, which was located at around $1,640, would have been needed to continue the recent bullish trend.

However, the price slid below the lower trendline of the pattern as it failed to break through the pattern to the upside. The price change came during an increase in exchange reserves and a period of market inactivity, which had traders fearing more price drops for the cryptocurrency.

What is a rising wedge? A rising wedge is a chart pattern that is usually encountered in a strong uptrend and signals that the price will continue to rise. However, the pattern is said to become valid when the price drops below the lower boundary of the pattern.

As the price moves lower, it is also expected to test major support levels. In the case of ETH, the $1,580 zone, which also aligns with a key Fibonacci retracement, becomes an area of focus.

A breakdown below this level could open the path to $1,550 and possibly $1,525. If selling pressure continues, ETH could drop to $1,450 or $1,420 in the days ahead.

What is weak: The technical strength of the ETH uptrend appeared to be decreasing as it slid below the 100-hour simple moving average and showed a lack of follow-through after previous attempts to break through resistance at $1,640 and $1,680.

Volume also decreased as the price moved lower, which was confirming the negative market trends. The price was also holding below the 50 level on the Relative Strength Index (RSI), which signaled that purchasing power was still weak.

On broader timeframes, ETH was also trading below its 200-day and 50-day moving averages. These averages were acting as resistance, especially around the $1,950 mark. The inability to push above those levels signaled that bears were still in control, making it harder for ETH to recover in the short term.

What is strong: On-chain data showed that a large amount of ETH was being moved back to centralized exchanges. More than 368,000 ETH had been sent to exchanges since early April.

This activity pushed total exchange reserves to approximately 18.95 million ETH, which reversed the decline that was seen in March. The rise signaled that holders might be preparing to sell or trade their assets more actively.

The increase in exchange reserves came after a period of price decline, which was known to be a factor that contributed to short-term market sell-offs. The price had been declining while reserve amounts increased from March 24 to April 5.

The buildup of investor wariness alongside price declines created this typical trend, which signaled forthcoming market drops. Data on the withdrawal activity of institutional investors did not show any obvious signs of large-scale ETH detachment throughout this period.

Several analysts noted that ETH’s recent price increase did not seem to be accompanied by corresponding positive changes in the blockchain network.

The lack of significant movement in market price and long-term holder participation suggested that the short-term bullish momentum was weak, which kept sentiment among traders uncertain.

What to expect: Patterns on extended timeframes were developing bearish characteristics. Technical setups of this type usually signaled that the present downward or upward movement tended to continue until the pattern was fully formed.

ETH encountered difficulties in breaking through the $1,950 resistance level while exhibiting decreasing higher points, which indicated unfavorable market conditions. The pattern becomes evident by a drop below $1,820, which would accelerate selling.

Adding to the concern, Ethereum’s market dominance is nearing all-time lows, reaching levels not seen since 2019-2020. According to crypto analyst Rekt Capital, ETH must hold a critical support zone to regain strength in the broader market. A failure to do so could signal continued weakness.