Ethereum has encountered a significant roadblock as it fails to sustain bullish momentum, dipping below $2,700. After attempting a recovery and surging toward the $2,750 resistance level, Ethereum’s price reversed once again, causing the price to drop to $2,663. With Bitcoin also experiencing a downturn below the $96,000 mark, Ethereum’s attempt at a price rally fizzled out, leaving investors questioning whether further declines are inevitable.

Currently, Ethereum’s price trend is showing continued weakness, with the broader market’s volatility exacerbating the situation. The cryptocurrency has already seen a decline of approximately 35% since its double-top reversal in late 2024, where it reached higher levels before facing sharp corrections. Ethereum’s most recent move has led it to find short-term support around the $2,600 mark. However, despite this level of support, the crypto asset is struggling to overcome the resistance near the $2,750 range, making it difficult for bulls to gain control.

Ethereum’s intraday pullback has undermined the price surge it experienced just a day prior, casting doubts on the strength of the recovery. If Ethereum fails to maintain its short-term support at $2,600, it may soon face a deeper decline toward the next major support zone at $2,400. The key technical indicator to watch in this scenario is the recent “death cross” that occurred between Ethereum’s 50-day and 200-day exponential moving averages (EMAs). This signals a possible prolonged sell-off, and it indicates that the momentum is currently in favor of bears.

Additionally, Ethereum’s 100-day EMA is on the verge of crossing below the 200-day EMA, which would further reinforce the bearish sentiment in the market. The MACD, which had previously shown bullish momentum, has now shifted, with bearish histograms indicating a reversal in trend. These technical signals align with the prevailing market conditions, suggesting that Ethereum could face further downside if the market sentiment does not change quickly.

However, there are some positive factors in Ethereum’s favor that could potentially support a recovery. The growing institutional interest in Ethereum could provide the necessary backing for the cryptocurrency to regain bullish momentum. Spot Ethereum exchange-traded funds (ETFs) in the U.S. have seen massive inflows in recent weeks, with 145,000 ETH tokens added in February alone. This marks a nearly seven-fold increase compared to the entire month of January, signaling that institutional demand for Ethereum is on the rise.

Moreover, Ethereum’s declining exchange reserves further bolster the case for potential recovery. As reported by Santiment, only 6.38% of Ethereum’s total circulating supply remains on exchanges, marking the lowest percentage since its inception. With fewer ETH tokens available for sale on exchanges, the market could experience upward pressure if demand continues to rise.

If Ethereum manages to stabilize and recapture bullish momentum, the next key resistance level will likely be around the $3,000 mark, which aligns with the 50-day EMA. This level could prove to be a psychological barrier, but whether Ethereum can break through it will depend largely on market conditions and investor sentiment.

In conclusion, while Ethereum faces significant bearish pressure and could see a drop to $2,400, there are potential catalysts, such as institutional interest and a decreasing exchange supply, that could support a future rebound. Traders and investors will need to closely monitor the upcoming price action and the broader market sentiment to determine whether Ethereum can recover or face further declines in the near future.