Ethereum has been experiencing significant downward pressure, as the ongoing bear market intensifies. The cryptocurrency has seen a substantial drop over the past few days, and it now finds itself testing crucial support levels that could determine its next major price movement. Ethereum’s price recently fell below the $2,400 mark, trading at $2,337, marking a nearly 6.4% decrease in just 24 hours.

The latest price action has prompted concerns that Ethereum may struggle to hold above key support levels. For the past three days, Ethereum has formed consecutive bearish candles, pushing its value down from around $2,800 to its current price near $2,337. This represents a nearly 20% loss in just a short period. This drop has caused Ethereum to breach the 23.6% Fibonacci retracement level at $2,665, a critical technical level often used by traders to predict price movements.

The increasing bearish pressure is confirmed by technical indicators. The 100 and 200-period Exponential Moving Averages (EMAs) have recently given a negative crossover, signaling a bearish trend. A negative EMA crossover typically triggers a sell signal for traders and suggests further declines in the price of an asset. However, there is some hope for short-term recovery, as the Relative Strength Index (RSI) has shown a slight bullish divergence, hovering just above the oversold boundary. This indicates that there could be a potential buying opportunity if the market finds support at its current levels.

Despite the slight bullish divergence in the RSI, the bearish market trend continues to weigh heavily on Ethereum’s price action. Furthermore, institutional investors and large holders have contributed to the bearish sentiment by offloading significant amounts of Ethereum. According to recent data, the U.S. Ethereum spot ETFs experienced outflows of $94.27 million, the highest recorded since January 27. Among the largest institutional players, BlackRock led the pack, dumping $69.76 million worth of Ethereum, followed by Fidelity, which offloaded $18.38 million. Grayscale and Bitwise also contributed to the outflows, selling smaller amounts of Ethereum.

This wave of institutional selling is concerning for the price stability of Ethereum, as the net outflows mark the longest period of consecutive losses since November 2024. Additionally, Ethereum whales have been offloading large amounts of ETH. Over the past week alone, Ethereum whales have sold off 440,000 ETH, increasing the market’s supply and contributing to the ongoing downward trend.

As Ethereum continues to test key support levels, the next major area of focus will be the $2,200 mark. If Ethereum falls below this level, it could trigger a deeper decline toward the psychological support level at $2,000. This level holds significant importance for traders, as a breach below $2,000 could lead to increased selling pressure and further downside risk for Ethereum. On the flip side, if Ethereum manages to stabilize and reclaim the $2,400 mark, it could offer a chance for a potential rally.

Despite the bearish outlook in the short term, the Ethereum market remains subject to high volatility, and market sentiment could shift quickly. If Ethereum can recover from its current support levels and attract new buying interest, the 23.6% Fibonacci retracement level at $2,665 will serve as the immediate price target. However, for now, Ethereum is at a critical juncture, and traders are carefully watching how the market reacts to these key support levels.