Ethereum May Drop 40% If Key Level Breaks – Analysts Warn

A Bearish Pattern Emerges

Generally, I Am seeing Ethereum hovering just under $2,900 and it feels like a warning sign.
Obviously, The chart shows a bear flag, and Trader Tardigrade says we already slipped below the lower line on a three day view.
Apparently, If it cant close above $2,906 in the next day or two, the pattern may confirm and we could see a dive to $1,666.
Normally, That would be a 40% plunge, something I never expected after the 10% weekly loss.
Sometimes, The price tried $2,700-$2,800 before, but the rebound was weak, leaving traders uneasy.

Market Sentiment and Trader Activity

Currently, Ted told me ETH is flat near $2,900 after a sell off.
Usually, Open interest climbed to 5.255 million, which means many are waiting for a breakout or breakdown.
Interestingly, Funding rates dropped to 0.0011, showing the excitement is fading a bit.
According to him, “Old degens got liquidated, and now new ones have arrived,” hinting at a shift.
Possibly, Rising open interest with stagnant prices could mean traders are bracing for big moves, but I’m not sure which way.

ETH/BTC Pair Under Pressure

Clearly, Michaël van de Poppe points out the ETH/BTC pair is stuck on a key support.
Obviously, It’s trading below the 21 day moving average, a bearish sign that worries me.
Sometimes, If ETH can hold that zone, maybe it can rally against Bitcoin.
Generally, If it breaks, the pair may fall further, hurting Ethereum’s market dominance.

Whale Activity and Institutional Trends

Apparently, CW told me the current range looks like a whale accumulation zone.
Usually, Large holders might see buying chances there, but I’m skeptical.
Interestingly, Ali Martinez shows whale holdings have been dropping since January, suggesting some are unloading.
Possibly, That decline matches recent losses in ETH-based ETFs, adding more doubt.

What’s Next for Ethereum?

Currently, The next 24-48 hours are crucial – if ETH stays above $2,906, the bearish flag could be invalidated.
Sometimes, If it slips, we might see a cascade driving the price toward $1,666.
Generally, Traders should watch support and resistance closely, plus any shifts in open interest or whale moves.
Obviously, I think the battle to avoid a 40% drop is far from over, and the market could turn dramatic any minute.