Ethereum 'Frustrated' at $2,400 Again... Crossroads: $1,600 Crash vs $4,800 Explosion

▲ Ethereum (ETH), decline/AI-generated image

Tension is mounting in the market as Ethereum (ETH) approaches a critical juncture. Amid the clash between the expectations of investors betting on a short-term recovery and the pressure from short-sellers, analysts have diagnosed that Ethereum has entered a decisive phase where it could either fall to $1,600 or signal a breakout to $4,800.

According to the cryptocurrency media outlet CryptoPotato on May 7 (local time), crypto analyst EGRAG CRYPTO stated in an analysis posted on X (formerly Twitter) that Ethereum has been compressed for a long time within a large ascending triangle structure on the weekly chart. Ethereum continues to hold the Ethereum line, a macroscopic support level that has sustained the chart for several years.

EGRAG CRYPTO believes that the current setup is open in both directions in the short term. If the current structure breaks down, $1,600 emerges as a structural failure zone, and if it successfully breaks out, $4,800 is presented as the initial trigger zone. He said, “$4,800 is the breakout trigger. $1,600 is the structural failure zone. Ethereum is approaching decision time.”

The market flow remains in an uncomfortable waiting state. Trader Ted Pillows pointed out that Ethereum has repeatedly failed to hold above $2,400, and spot demand remains weak. He asserted, “Until that trend changes, Ethereum will continue to underperform the market.”

On-chain position data also shows short-term pressure. Analyst CW8900 explained that high-leverage long positions have noticeably decreased, while short interest has slightly increased. He analyzed that short positions are concentrated between the current price and $2,500, and if Ethereum cleanly breaks above $2,500, a rapid move towards $3,000 could occur.

There was also a diagnosis that background signals are more bullish than price movements. A CryptoOnchain report stated that the 7-day average of Ethereum staking inflows surged from around 28,200 ETH to nearly 144,000 ETH on May 5. This suggests that a decrease in circulating Ethereum could lower selling pressure if demand is maintained. Analyst Ali Martinez stated that Ethereum has risen over 30% since the Supertrend buy signal in mid-March.

Ethereum recently briefly touched $2,400 before pulling back to around $2,300 at the time of writing. However, it is up approximately 11% over the past month and about 27% year-to-date. Ali Martinez believes that Ethereum’s realized price is around $2,380, and if it breaks and holds this level, a significant number of holders could move from loss to profit. He identified $2,772 and $2,921 as the next major supply concentration zones.

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