Ethereum's 7% Weekly Drop May Be Just the Start as Buyers Struggle to Hold Support
Key Summary
Ethereum is testing a critical support confluence below $2.4K as its correction continues, with buyers struggling to hold the area despite several sharp reactions. The asset has declined into the highlighted $2.36K–$2.44K demand zone, where the lower boundary of the broader ascending channel provides additional support. However, persistent lower highs suggest that selling pressure has yet to ease, and a decisive daily close beneath $2.36K would weaken the broader recovery structure.
Precedent & Market Context Ethereum has been experiencing a correction since early October, with the asset declining into the highlighted $2.36K–$2.44K demand zone. Despite several sharp reactions, buyers have struggled to hold the area, with the asset currently near $2.36K. This decline is reminiscent of previous corrections, where the asset has formed lower highs and failed to break the upper trendline. In contrast, Solana has shown resilience and outperformed Ethereum in various metrics, including 1-month and 90-day windows, as well as its key support level.
Main Event The one-month ETH liquidation heatmap highlights a substantial estimated liquidation cluster around $2.15K–$2.2K, above the psychological $2K threshold. The band has remained visible across multiple sessions and is particularly bright near the chart’s latest readings, indicating a significant concentration of potential liquidation exposure below the current price. This cluster becomes especially relevant if Ethereum loses the $2.36K support zone and its broader ascending structure. Under that scenario, further declines could trigger long liquidations as the price approaches $2.2K, potentially accelerating the move into this liquidity pool.
Analysis & Market Impact The 4-hour chart shows Ethereum trading within a descending channel following the sharp early-October selloff. Repeated rebounds have failed to break the upper trendline, while the latest candles are consolidating inside the $2.36K–$2.44K demand zone. A sustained breakout above both the demand zone’s upper boundary and this trendline would interrupt the immediate bearish structure and could allow a move toward $2.5K–$2.58K. Until that occurs, another test of $2.35K remains possible.
Implications & Outlook A decisive daily close beneath $2.36K and the ascending channel boundary would weaken the broader recovery structure, increasing the risk of a deeper correction toward $2.2K. However, if buyers can reclaim the $2.44K demand boundary and then overcome the recent $2.5K–$2.56K resistance area, it could support a recovery toward the former consolidation around $2.67K–$2.74K. The proximity of the liquidation cluster to the $2.2K–$2.27K technical demand zone adds significance to that broader area, but a sustained recovery above nearby resistance would reduce its immediate relevance.