Ethereum Faces Mounting Pressure: Could ETH Plunge to $2.2K?
Ethereum’s recent market dynamics have turned sharply bearish, with the cryptocurrency now under significant selling pressure after erasing all of its gains for 2025. The price of Ether (ETH) dropped to $3,300 — a level that mirrors its opening price at the start of the year — signaling a full retracement of its year-to-date performance.
Over the past 24 hours, Ethereum has seen a steep decline of nearly 16%, briefly touching $3,050 before staging a minor recovery back to around $3,300. This correction has been accompanied by a wave of leveraged position liquidations across the broader crypto market. According to data from CoinGlass, more than $1.7 billion in crypto positions were liquidated, with long ETH positions accounting for $484.8 million of that total. One notable liquidation occurred on the Hyperliquid DEX, where a single $26 million ETH/USD position was forcefully closed.
The magnitude of these liquidations is comparable to previous sharp corrections, such as those on August 1 and September 22, when similar amounts of long ETH positions were wiped out, resulting in double-digit percentage price crashes. These events underline the volatility and fragility of leveraged trading in crypto markets, particularly during periods of declining sentiment.
Technically, Ethereum’s price structure is forming a bearish pennant — a continuation pattern typically observed during downtrends. This pattern has emerged after a steep drop, followed by a brief period of consolidation within an upward-sloping triangle. Now, ETH is retesting the lower edge of this formation, currently sitting near $3,300. A breakdown below this level could validate the pennant and set the stage for a further drop to the next major technical target around $2,380 — a potential 29% decline from current levels.
Adding to the bearish outlook, trader sentiment in the derivatives market has shifted decisively toward risk aversion. Open interest in ETH futures has declined, and funding rates have turned negative, indicating that short positions are becoming more dominant. This shift suggests that traders are increasingly betting on further downside in Ethereum’s price.
Despite the bearish setup, there are still signs of potential support. The relative strength index (RSI) has rebounded from an extremely oversold level of 18 to 33, suggesting that some traders are stepping in to “buy the dip.” If ETH can manage a daily close above the $3,400 resistance level, it may initiate a short-term recovery toward the 50-day simple moving average (SMA) at $3,700 and potentially even retest the $4,000 mark, where stronger resistance awaits.
Crypto analyst Don Laguzzi remains cautiously optimistic. He notes that as long as ETH holds above the $2,800–$3,000 range, the broader bullish structure — particularly a developing “W” pattern on the weekly chart — remains intact. This double-bottom formation often serves as a precursor to bullish reversals, provided the price doesn’t break below the mid-point neckline.
However, if bears succeed in pushing the price below $2,750, this optimistic scenario would be invalidated, opening the door for a deeper move toward $2,200. This level is seen as a key psychological and technical support zone and could be tested if selling pressure intensifies.
Looking ahead, several macroeconomic and on-chain factors could influence Ethereum’s next move:
1. Investor Sentiment Across Crypto Markets
Broader uncertainty across global financial markets continues to weigh on digital assets. If risk-off sentiment persists due to macroeconomic factors such as inflation, interest rate hikes, or geopolitical tensions, cryptocurrencies like ETH may continue to struggle.
2. Ethereum Network Activity
On-chain data such as daily active addresses, gas consumption, and transaction volume are critical for gauging the underlying strength of the Ethereum ecosystem. A decline in these metrics could signal weakening demand and further pressure prices.
3. Ethereum ETFs and Institutional Inflows
The recent outflows from Ethereum-based ETFs and a slowdown in institutional interest might also be contributing to the bearish momentum. By contrast, altcoins like Solana have seen capital inflow despite the broader downturn, suggesting a rotation of capital within the crypto space.
4. Layer 2 Scaling Solutions and Ecosystem Development
Ethereum’s long-term value proposition remains tied to its role as the backbone of DeFi, NFTs, and Web3 applications. Accelerated adoption of Layer 2 solutions like Optimism and Arbitrum could eventually bolster ETH demand, even if short-term price action remains bearish.
5. Market Liquidity and Whales’ Behavior
Large holders (commonly referred to as ‘whales’) can significantly impact price action. Recent on-chain transactions show a mixed trend, with some whales accumulating at lower levels while others continue to offload holdings, adding to volatility.
6. Upcoming Network Upgrades
Ethereum developers are preparing for further updates to improve scalability and reduce transaction costs. Any progress or delays in these upgrades can influence investor confidence and price performance.
7. Correlation with Bitcoin and Broader Markets
ETH often follows Bitcoin’s lead. If BTC breaks down below key support levels, ETH is likely to follow suit. Conversely, a rebound in Bitcoin could provide ETH with the momentum needed to reclaim higher levels.
8. Speculative Interest and Derivatives Market Dynamics
Open interest, funding rates, and options data suggest that many traders are bracing for continued volatility. A sudden shift in sentiment could trigger either a short squeeze or another wave of liquidations, depending on market direction.
9. Retail Participation and Social Sentiment
Retail investor behavior, often influenced by news cycles and social media, plays a crucial role in crypto price movements. If confidence returns, particularly among retail traders, it could fuel a short-term rally.
10. Regulatory Developments
Any news regarding Ethereum’s classification by regulators or new crypto policies could act as a catalyst — either positive or negative. Uncertainty in this area continues to be a headwind for investor confidence.
In conclusion, Ethereum stands at a critical juncture. The current technical setup and market sentiment suggest a strong possibility of further downside, potentially toward the $2,200 level. However, several factors, including improving RSI values and key support zones, could offer short-term relief. For now, traders and investors should remain cautious, closely monitoring both technical indicators and macroeconomic developments before making decisions.