Ether range trades below key technical resistance

​​​Ether range trades below key resistance

​Over the past few weeks, Ether (ETH) has come under heavy selling pressure, catching many traders by surprise and reinforcing that even the largest altcoin remains highly vulnerable to broader market forces and technical fragility.

​What started as a routine pullback quickly turned into a deeper, sharper decline, driven by a mix of macro headwinds, leveraged position unwinds in derivatives markets and inconsistent institutional support. Together, these forces undermined short-term confidence in ETH and accelerated downside momentum.

​Before the drop intensified, Ether had been trading in a relatively narrow range through late January. Sentiment was supported by the view that recent protocol progress -  particularly the Fusaka rollout, which improved layer-2 throughput and lowered costs - would translate into stronger adoption and demand. Some traders were also positioning ahead of key macro releases and potential regulatory developments, and this cautious optimism was reflected in moderate inflows into spot ETH exchange-traded products.

​The sell-off accelerated after a sudden deterioration in cryptocurrency demand as precious metal prices surged. Ether - often treated as one of the more economically sensitive cryptocurrencies because of its close ties to DeFi and token activity - was among the hardest hit. As risk appetite weakened, investors prioritised liquidity and rotated out of high-beta assets like ETH into less volatile exposures.

​A key factor that intensified the move was derivatives positioning. In the run-up to the decline, ETH futures funding rates had been elevated, signalling that long exposure was building as traders anticipated a breakout from the recent range. When rallies repeatedly failed and ETH slipped through key short-term supports, stop-loss orders were triggered at scale and liquidations rapidly accelerated. The forced unwinding of leveraged longs added disproportionate selling pressure, driving prices lower than fundamental selling alone would likely have achieved and creating a self-reinforcing feedback loop.

​Institutional behaviour reflected the same shift in tone. While some newer spot ETH products attracted inflows earlier in January, the last two weeks have seen larger allocators turn more cautious. Outflows from legacy Ether trusts and the lack of decisive dip-buying from institutional desks highlighted a more tactical, risk-managed approach. This contrasted with earlier periods when institutions appeared more willing to absorb weakness. The absence of meaningful institutional support during the early stages of the sell-off left ETH more exposed to downside acceleration.

​Ethereum-specific sentiment also contributed to the weakness. Ongoing debate around layer-2 fee dynamics - especially questions over how sustainably layer-2 networks can drive volume and economic value - combined with intensifying competition from rival smart contract platforms to keep the tone cautious. While these issues do not suggest structural failure, they weighed on near-term conviction and reduced the willingness of holders to defend lower levels aggressively.

​Despite the scale of the pullback, there are signs the move was driven more by market mechanics and sentiment than by a collapse in Ethereum’s underlying utility. On-chain indicators still point to strong staking participation, with a large share of ETH locked into long-term holding profiles, limiting liquid supply. Developer activity and ecosystem expansion - particularly across DeFi integrations and non-fungible token (NFT) infrastructure - also remain resilient compared with many competing networks.

​Looking ahead, Ether’s near-term direction is likely to remain closely tied to cryptocurrency demand. If crypto liquidity stabilises, ETH could begin to find firmer support and rebuild momentum. If risk aversion returns or financial conditions tighten again, Ether could remain vulnerable to another wave of selling, particularly if leverage continues to unwind.

​For now, the recent sell-off is a clear reminder that even assets with strong on-chain fundamentals and deep developer ecosystems can weaken rapidly when sentiment shifts, leverage is forced out and macro risk appetite deteriorates.

​​Ether bearish case:

​While Ether trades below its 8 February high at $2149.30, downside pressure remains dominant with the $1900 region remaining in sight. Further down sits the current February low at $1747.01.

​Ether bullish case:

​For Ether to become short-term bullish it not only needs to hold above its 6 February low at $1747.01 but also rise above its 8 February high at $2149.30. Only then would and advance towards the $2400 region potentially be on the cards.

​​Short-term outlook:

Neutral with a bearish bias while below the 8 February high at $2149.30.

​​Medium-term outlook:

Neutral with a bearish bias while below the 8 February high at $2149.30 but above the 6 February low at $1747.01.

Ether daily candlestick chart