Ethereum’s price has shown resilience recently, trading 25% above its eight-month low of $2,112 reached on August 5. The second-largest cryptocurrency by market capitalization has experienced a 13% gain over the past seven days, pushing its value to $2,651. However, market analysts warn that this upward momentum may be short-lived, with risks of a further decline still looming.
ETH/USD daily chart. Source: TradingView
Arete Capital partner McKenna shared a cautious outlook on Ethereum’s price, suggesting that it is unlikely to break above the $2,800–$2,900 range. In an August 15 post on X, McKenna noted that Ether’s recent surge to $2,750 faced stiff resistance near the $2,800 mark. The analyst emphasized the importance of the current price levels, stating that they would hesitate to go long on Ethereum under current conditions. Instead, McKenna views the lower range as a potential buying opportunity.
BTC/USD daily chart. Source: McKenna
Renowned analyst Peter Brandt also highlighted two possible scenarios for Ether based on current chart patterns. The first scenario envisions Ethereum rising above $2,960, which would present an ideal exit point for long positions. The alternative scenario suggests a breakdown of the rising wedge pattern, potentially leading to a decline toward $1,650.
John Morgan, an independent trader, pointed out a bearish shift in market sentiment, evidenced by the recent decline in Ethereum’s funding rates. Typically, negative funding rates suggest that short positions are paying long positions, indicating a market bias toward further downside.
ETH/USD price chart. Source: Peter Brandt
Technical analysis supports these bearish concerns, with Ethereum’s price action forming a bear flag on the daily chart. Despite the recent recovery, the flag’s lower boundary at $2,540 remains a critical support level. A daily close below this point could trigger a bearish breakout, potentially pushing Ethereum’s price down to $1,640. This move would represent a significant 35.82% drop from current levels.
As market sentiment and technical indicators lean towards a bearish outlook, Ethereum traders remain cautious, bracing for the possibility of a deeper correction.
