Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been experiencing a tumultuous period lately. Over the past month, the digital asset has dropped by 11%, with its price currently hovering around $2,300, according to Coin Gecko data. This significant decline has intense debate among crypto analysts. Some believe the worst is yet to come, while others foresee a strong rebound.

In the short term, Ethereum faces the possibility of a steep correction, with some experts warning of a potential crash toward $1,800 if critical support levels are broken. At the same time, other market observers are optimistic, predicting that Ethereum could be setting up for a strong rally. With these opposing views, the big question remains: Will Ethereum crash further, or is it on the verge of a new bull run?

Bearish Predictions: Could Ethereum Plunge by 20%?

Ethereum’s recent price action has raised concerns among some analysts, with particular attention on its critical support levels. Crypto analyst Ali Martinez, active on social media platform X (formerly Twitter), has outlined a specific range—between $2,290 and $2,360—as a crucial zone for Ethereum. According to Martinez, around 1.9 million Ethereum addresses collectively hold $52.3 million worth of ETH within this range.

The concern among bears is that if Ethereum breaks below this key support zone, it could trigger a significant sell-off, potentially pushing the asset down to $1,800—a sharp 20% drop from its current price. Ethereum briefly dipped to $2,260 recently, heightening fears that a deeper correction could be imminent.

One metric adding weight to these concerns is the “In the Money” indicator, which tracks the percentage of investors who are currently profiting from their Ethereum holdings. As of now, around 54% of Ethereum holders are “in the green,” while 39% are in a loss position. Notably, this indicator has been decreasing, dropping by 0.19% on a daily basis. This trend could signal a weakening market, increasing the likelihood of a price correction.

Given these bearish indicators, ETH investors should brace themselves for further potential declines. If Ethereum fails to hold above its support levels, the asset could be headed toward the $1,800 mark in the near future.

Bullish Outlook: Could Ethereum Stage a Strong Comeback?

While some analysts are sounding the alarm, others see a different scenario playing out. Several prominent voices in the crypto community are suggesting that Ethereum may be poised for a rebound rather than a collapse. One of the key arguments for this bullish outlook comes from the trader Phoenix, who claims that Ethereum’s recent price action has formed a “bear trap.” A bear trap occurs when investors mistakenly believe an asset is in a downtrend, only to see it reverse course and rally. If Phoenix’s analysis proves accurate, Ethereum could be on the verge of a strong recovery.

Adding to this optimism, crypto analyst Javon Marks believes that Ethereum’s current pattern closely resembles a previous cycle in 2023, which led to a 165% surge in price. Marks is confident that this pattern could repeat itself, predicting a target of $4,723.5 for Ethereum in the coming months. If Ethereum manages to break through this level, he suggests that the next price target could be as high as $8,100, which would represent a near doubling of its current value.

Moreover, Ethereum’s Relative Strength Index (RSI)—a widely-used indicator that measures whether an asset is overbought or oversold—has recently fallen to a ratio of around 30. An RSI below 30 typically indicates that an asset is oversold and may be due for a reversal, which is good news for the bulls. Conversely, an RSI above 70 often signals overbought conditions, suggesting a potential price correction. With Ethereum’s RSI hovering near oversold levels, a price rebound could be on the horizon.

What’s Next for Ethereum?

Ethereum’s immediate future remains uncertain, with the potential for both a crash and a rally in the short term. On one hand, bearish analysts warn of a 20% plunge if Ethereum fails to hold its key support levels. On the other hand, bullish traders argue that Ethereum may be forming a bear trap, setting the stage for a strong recovery.

Several factors will likely determine which scenario plays out, including Ethereum’s ability to maintain its support above the $2,290-$2,360 range, as well as the broader crypto market sentiment. Traders should closely monitor Ethereum’s price action, along with key indicators like the RSI and the “In the Money” metric, for signs of what’s to come.

For now, Ethereum holders will have to navigate through this period of volatility, with both caution and optimism. Whether the market is about to witness a 20% drop or a renewed rally remains to be seen, but one thing is certain: Ethereum’s next move will be closely watched by investors and analysts alike.

Conclusion: Ethereum’s Fork in the Road

Ethereum’s recent struggles have left the market divided, with some bracing for a significant downturn and others expecting a recovery. As the asset tests key support levels, the outcome will likely hinge on market dynamics in the coming days. Will Ethereum break lower toward $1,800, or will it defy the bears and climb to new highs? Only time will tell, but one thing is clear: Ethereum’s future is anything but boring.