Ethereum (ETH) is sitting at a crossroads that, according to a popular analyst, could define the next major chapter for the second-largest cryptocurrency.
That call landed as the asset slipped almost 4% in 24 hours, failing at the $2,400 range while facing growing pressure from short sellers betting against a near-term recovery.
What the Weekly Chart is Telling Us
Crypto analyst EGRAG CRYPTO posted a detailed breakdown on X on Thursday, arguing that ETH has spent a significant period compressing inside what he describes as a “massive Ascending Triangle structure” on the weekly timeframe.
The asset has continued to respect what he calls the macro “ETH Line,” a long-standing support level that has anchored the chart for years.
The setup is binary, at least in the near term, since a breakdown from the current structure points toward $1,600, which EGRAG labeled the “structural failure zone,” while a successful breakout would target $4,800 at the initial trigger level.
They also floated a much larger upside target of $33,000 if euphoric market conditions return, though their near-term focus stayed on the fight between support and resistance.
“$4,800 = breakout trigger. $1,600 = structural failure zone. ETH is approaching decision time,” they wrote.
The market right now is in an uncomfortable holding pattern. Fellow trader Ted Pillows posted that ETH has repeatedly failed to hold above $2,400, and that spot demand was still weak.
“Until that changes, ETH will continue to underperform the market,” he claimed.
That assessment matches up with on-chain positioning data shared by analyst CW8900 earlier today, who noted that high-leveraged long positions have decreased noticeably while short interest has risen slightly.
According to them, there’s a cluster of short positions sitting between current prices and $2,500, with a clean break above that level having the potential to trigger a quick move toward $3,000.
Why the Backdrop Is More Bullish Than Price Suggests
There are other supporting signals outside the chart that suggest ETH’s weakness may be temporary.
For example, a CryptoOnchain report from Tuesday noted a sharp rise in Ethereum staking inflows, with the seven-day average going from around 28,200 to nearly 144,000 by May 5, removing more ETH from liquid circulation and possibly reducing selling pressure in case demand holds steady.
Elsewhere, analyst Ali Martinez pointed out that ETH had rallied more than 30% since a SuperTrend buy signal flashed in mid-March.
That move brought the asset to its Realized Price, sitting around $2,380, which represents the average value at which all tokens last moved on-chain. Breaking and holding above it would shift most ETH holders from being underwater to being in profit, which on past occasions became a point where selling pressure softened.
Further, he identified $2,772 and $2,921 as the next meaningful supply concentrations above that level.
After briefly touching $2,400 yesterday, Ethereum had dropped back closer to $2,300 at the time of writing. But the drop notwithstanding, it’s still up about 11% over the past month and roughly 27% on the year.
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