What are the Odds of Ethereum Plummeting Below $2k?

Ethereum experienced another significant dip during the previous intraday session, entering a buy zone.

The asset plummeted to its lowest value since July but rebounded. It erased losses and continued upward, buoyed by news on US initial jobless claims. However, the 1-day chart shows that the upward momentum was slowly waning in the late hours of Tuesday.

Ethereum experienced notable declines in the early hours of Wednesday. As a result, it dropped to a low of $2,898. It rebounded, and data suggest traders remain cautious about the next price action.

ETF Outflows

Since last week, exchange-traded funds have been a major factor contributing to the massive decline the asset is experiencing. One of its biggest selloffs occurred on Thursday, when ETFs tied to the altcoin recorded an outflow of $259 million.

Prices reacted with one of the largest declines. ETH lost a whopping 5% and dropped from a high of $3,564. The asset saw a slight recovery over the weekend, but it was short-lived, as it resumed its downtrend on Monday.

The current week started on a bearish note for the same reasons as Thursday: ETF outflows. This time, investors offloaded $182 million. Selling continued into the previous intraday session, and the investment funds shed $74 million.

While the latest figure is the lowest in the last five days, prices are yet to respond positively to slowing outflows. On Wednesday, ETH resumed its downtrend after the slight increase on Tuesday. It has since erased the previous day’s gains and registered a new low.

Ethereum opened the day at $3,124 but retraced, dropping to a low of $2,894. Down by over 6%, the bulls are struggling to cause a significant rebound. Current price shows limited success, but the asset remains in a danger zone.

The recent decline is unsurprising, as a previous analysis noted that a slip to this level would happen. It also warned about further declines.

Investors are closely watching ETF data to understand the next price direction. However, there’s a high chance that the outflow persists.

BlackRock Continues Selling

A few hours ago, Lookonchain reported several large transfers from BlackRock to CoinbasePrime. One that caught attention was the transfer of 64,706 ETH, worth over $200 million, into the exchange.

The latest move is not the first of its kind this month. Recent data indicate that the firm has been on a selling spree over the last three days. On Monday, it sold 54,730 ETH, and on Tuesday, it sold $200 million worth of the coin.

Cumulatively, the firm has sold $533 million in ETH since the start of the week. News of BlackRock’s selling has resulted in further declines as more investors fear further declines and join the frenzy.

One such is an unknown whale who had been buying the dip from Nov 3 to Nov 10, buying 30,838 ETH ($110.43M) at an average price of $3,581. However, he recently sold 31,005 ETH ($92.19M), losing $18.8M in 2 weeks.

Data from CryptoQuant suggests the situation is far worse than Lookonchain stated; retailers are joining the frenzy. As a result, exchange reserves are increasing as more traders are dumping their bags. 

The bearish trend extends to derivatives as the taker buy-sell ratio remains below 1. Additionally, total liquidations over the last 24 hours exceeded $560 million. The most rekt capital happened on ETH, with total losses reaching $216 million.

Nonetheless, more traders are avoiding the market after the latest declines. Open interest has since dropped by over 3% amid growing long positions. 

Away from onchain analysis, the chart warns of more downtrends ahead. 

Ethereum Must Hold $2,850

A few months ago, an outlook cited the bollinger bands as the basis for its conclusion that Ethereum would retrace below $2,900. At that time, ETH broke out of the band on the 1-week scale, and a retracement was almost inevitable.

The asset’s recent low confirmed the assertion. However, it has plummeted, testing the lower band as predicted, but remains at risk of further decline. Nonetheless, based on the band, ETH is due for a rebound. If that happens, it may signal the end of the downtrend. 

On the other hand, price continued below the lower band on several occasions. A repeat of this trend will see the altcoin slip further. In that case, it will not adhere to the principle of the bollinger bands.

Previous price action indicates that the second-largest coin is trading above a critical support level. The chart above depicts the importance of the $2,850 barrier. It served as a launchpad for attempts at $4k on several occasions. 

Conversely, losing the mark also resulted in a slip to $2,200. Trading action between July and August 2024 paints a clearer picture of how prices may react. In a worst-case scenario, the asset dropped below $2k, and the price action between February and May 2025 is a case study.

It is worth noting that the altcoin is seeing a slight rebound at the time of writing. There is also significant uncertainty across the market as investors remain in fear. As it stands, there’s a 50% chance the ongoing buyback will last. 

A slip below $2,850 places a 70% chance of a drop to $2,200. In turn, a drop below $2k becomes more realistic if the buyback fails at the support.

Odds of Ethereum Rebound Increase on the 1-day

The 1-day chart aligns with the 1-week chart, indicating that the asset is trading near a critical barrier. Focusing on trading actions in the first half of July indicates a higher likelihood of recovery.

Additionally, the relative strength index is at 31, teetering on the brink of being oversold. ETH rebounded in several instances when the metric bears such a reading.

However, it does not eliminate the possibility of a slip below the support. Failure to defend the mark will see Ethereum slip as low as $2,400. 

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