Ethereum (ETH), the second-largest cryptocurrency by market cap, is facing a critical moment as traders and analysts grow increasingly concerned about its ability to hold the $1,550 support level. Despite a recent bounce, on-chain data and technical indicators are painting a bleak picture for ETH’s short-term price action.

With the broader crypto market still feeling the aftershocks of regulatory uncertainty and whale-driven sell-offs, Ethereum’s road ahead looks turbulent. Here’s what traders need to know.

Key Support Zone Under Threat

ETH’s recent price movements have done little to inspire confidence among investors. After briefly rallying from $1,385 to $1,670 in early April—a 20% surge—Ethereum has since struggled to maintain momentum. Over the past week, bulls have fought hard to keep the price above $1,550, a crucial level that served as strong support during Ethereum’s recovery phase in late 2023.

But that support now appears fragile.

ETH has been in a downtrend since January 2025, marked by lower highs and lower lows, a classic sign of weakening bullish strength. The most recent high at $1,957 set earlier this month failed to break the bearish pattern. Unless buyers can push the price above this key level, the downtrend is expected to continue.

Technical Indicators Suggest More Pain Ahead

From a technical perspective, the outlook remains grim.

The Relative Strength Index (RSI) is currently sitting below 50, indicating that bearish momentum dominates. More tellingly, the On-Balance Volume (OBV)—a key indicator tracking the flow of trading volume—has been in steady decline, reinforcing the view that selling pressure is outweighing buying interest.

This consistent drop in OBV reflects a market that lacks strong conviction from buyers. In simpler terms, even when prices rise slightly, they do so on weak volume, making any bounce vulnerable to a swift reversal.

Liquidation Data Hints at Further Downside

According to recent data from Coinglass, the Ethereum liquidation heatmap shows significant liquidity clusters between $1,515 and $1,575, indicating that leveraged positions in this zone are at high risk of being wiped out. When such clusters form below the current price, they act like magnets, pulling prices downward.

What this means for ETH holders is simple: the path of least resistance is down.

As liquidation levels are triggered, a cascade of forced selling can accelerate the drop—potentially dragging ETH down to $1,275, a price target some analysts have already flagged as the next major support level.

External Pressure: SEC Delays and Whale Movements

The bearish sentiment surrounding Ethereum isn’t just technical—it’s also being fueled by major macro developments.

The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision on Ethereum-based ETFs related to staking and in-kind redemptions. The new deadline is now set for June 2025, leaving institutional investors in a holding pattern and removing a potential catalyst for upward price movement.

Adding to the woes, large Ethereum holders—commonly known as whales—have begun offloading their assets, contributing to increased supply and downward pressure on price.

Meanwhile, the rise of AI-powered blockchain competitors has raised renewed debates about Ethereum’s role in a rapidly evolving decentralized tech landscape. Critics argue that ETH could lose its dominance if it fails to scale and innovate at the pace of newer platforms.

Could ETH Bounce After Hitting Lower Levels?

Interestingly, while the short-term outlook is bearish, there may still be room for a relief rally.

Once the high-leverage positions around $1,515–$1,575 are liquidated and that downward liquidity is absorbed, analysts believe a bounce toward the $1,650–$1,700 range could occur. However, such a move would likely be temporary unless accompanied by significant buying volume and a shift in broader sentiment.

For Ethereum to truly break out of its downtrend, bulls would need to reclaim the $1,957 resistance and establish a new higher high—a task that currently seems far off given market conditions.

Final Thoughts: Is It Time to Brace for Impact?

Ethereum’s current trajectory suggests a volatile period ahead. With technical indicators flashing red, a bearish market structure in place, and external pressures weighing heavily, the chances of ETH falling below $1,550 are high.

For traders and investors, this means it’s time to tread cautiously, monitor support levels closely, and avoid overly leveraged positions that could be liquidated in sudden downturns.

While Ethereum remains a cornerstone of the crypto ecosystem, short-term weakness may persist—at least until new catalysts emerge or bullish momentum returns with conviction.