Ethereum Faces Downside Risk as Analysts Warn of Possible 20% Drop Toward $1,700

ETH struggles to hold key resistance after recovery

Ethereum is showing signs of weakness after its recent recovery from multi month lows below $1,800. The price failed to break the $2,400 resistance level, and analysts now warn that the market structure is leaning bearish again.

Exchange inflows raise selling pressure concerns

CryptoQuant Data shows a sharp increase in ETH moving onto exchanges, especially Binance, where reserves rose from 3.36 million to 3.84 million between May 5 and May 9. Analysts say this suggests more holders may be preparing to sell.

Analysts noted that price action failed to continue upward as inflows increased, dropping from $2,390 to $2,260 during the same period. Liquidity appears to be “absorbed and distributed within the range,” adding that downside risk remains dominant.

Another analyst, PelinayPA, said repeated inflows to exchanges often signal distribution from large holders and create strong resistance for any upward movement.

ETF outflows add to bearish pressure

Spot Ethereum ETFs also showed weakness, recording four straight days of outflows totaling around $190 million. Analysts say this points to falling demand from US investors and adds extra pressure on ETH.

Bearish pattern points to $1,725 target

On the technical side, ETH has broken below a rising wedge pattern after falling under support near $2,280. Analysts say a confirmed close below this level could open the way for a move down toward $1,725, a potential 22% drop from current levels.

Some analysts also warn that in a deeper bearish scenario, ETH could even slide toward $1,280 based on longer-term chart patterns.