A Small Drop May Lead to a 40% Pullback Soon

The latest rise above $2,500 in Ethereum prices suggests the revival of a strong upswing and the expectation of reaching $3000. Besides, the growing market sentiments were in favour of a substantial rise. However, the possibility of a constant rise remains differed at the moment as the second-largest token, Ethereum, is losing its grip over the rally. The Bulls are trying very hard to keep up the momentum, but a slight drop in their strength may lead to a huge pullback. 

Will the Ethereum price drop back below $2000?

The spot ETH ETF does not appear to have had a major impact on the rally, as they appear to be struggling. Ever since their launch, the ETFs have recorded negative total net flows, which is primarily believed to be due to the Grayscale Ethereum Trust bleeding cash. Hence, it also suggests the possibility of the money flowing out of Ethereum into the other altcoins. The ETH price has landed in a critical situation as another 40% drop appears to be coming after a 50% drop since the March highs. 

The ETH price traded within an ascending triangle and is about to break the lower support as the bulls appear to have become weak. The RSI has failed to rise above the ascending trend line as it has faced rejection at every attempt. Therefore, a rise beyond the pivotal resistance at $2682 may invalidate the bearish trajectory; otherwise, a drop below $2,300 may be imminent. 

However, there are some positive developments within the markets, as the ETH prices reaching lower levels may allow many new participants to enter the space. Once the bottom is hit, a very strong bullish opportunity may develop. If Bitcoin trades sideways, the other altcoins grow, but if the ETH price drops, it could remain unnoticed. Hence, the Ethereum price, which is trading in a critical position, is expected to hold the pivotal support, rise back above $2800 and reach $3000.