The price of Ethereum has fallen by about 1.4% in the past 24 hours, and the decline has widened. At first glance, this appears to be a routine decline during the consolidation phase. However, this decline did not appear randomly. This comes shortly after a warning signal flashed on the daily chart, suggesting that the recent recovery may already be losing momentum.
What makes this moment so unusual is the reaction from traders. Far from mitigating risk, leveraged long positions soared to more than $1 billion. This creates a dangerous contradiction. The same conditions warning of further declines are also attracting aggressive bullish bets. This rupture could determine Ethereum’s next big move.
Bearish divergences and supply clusters present the same risks
The first warning sign appeared through a hidden bearish divergence on the daily chart. From January 21st to February 25th, Ethereum price formed an even lower high. This means that the recent recovery has been weaker than the previous rally, confirming that the broad downtrend is holding.
At the same time, the Relative Strength Index (RSI), which measures the strength of momentum, rose even higher. This creates a hidden bearish divergence. This pattern usually appears during a downtrend and indicates that the recovery is temporary and a larger decline may follow.
Hidden Bearish Divergence: TradingView
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This signal becomes even more important as Ethereum is already down around 32% in the past 30 days. This confirms that the broader structure remains bearish. Now, on-chain data shows where this backlash is likely to accelerate.
Ethereum’s cost-based heatmap reveals a major support cluster between $1,870 and $1,890. Approximately 1.4 million $ETH accumulated within this range. This level is important because it represents the average buy zone for a large group of holders.
These holders are still making money at current prices. However, if Ethereum falls into this zone amid rising fears, many may sell to protect their profits. This could weaken support and deepen the backlash.
Cost-based cluster: Glassnode
This makes divergence warnings more dangerous because important support is nearby.
Whale sales and $1 billion long-term exposure spark dangerous conflict
At the same time, large holders are starting to show caution.
Ethereum supply held by whales slightly decreased from 113.41 million $ETH 113.39 million people on February 25th $ETH now. This isn’t a huge drop in the $40 million range, but it confirms that Whale is no longer actively accumulating.
This is important because whale activity often indicates future price direction. When whales stop buying or start selling, market confidence decreases. But derivatives traders have had the opposite reaction.
$ETH Whale”>
$ETH Whale: Santiment
Binance liquidation data shows that cumulative long leverage has exceeded $1 billion. By contrast, short leverage remains close to $382 million. This means that long exposures are nearly three times more expensive. More importantly, nearly $697 million of long leverage is concentrated around $1,870. According to the map, the risk starts to occur when: $ETH Prices drop below $2,015.
Liquidation Map: Coin Glass
This level aligns almost perfectly with the cost-based cluster starting around $1,870. This creates a high-risk situation.
If Ethereum falls into this zone, holders may start selling while leveraged long positions will be forced to close. These forced liquidations will push prices further down and accelerate the correction. That risk may be why the whales are retreating for now.
But despite these risks, traders are still betting on a breakout. The reason for this becomes clear in Ethereum’s price structure itself.
Ethereum price structure accounts for both $2,600 hope and failure risk
Ethereum’s recent price structure has created optimism that derivatives traders are betting on. On the 8-hour chart, Ethereum is forming a cup-and-handle pattern. This is a bullish structure that often appears before an upward breakout.
The handle is currently forming as a consolidation phase, which traders may be viewing as a lull before a breakout.
The neckline of this pattern slopes upward. An upward neckline strengthens expectations for a breakout if the price is able to break through a major resistance level. The important ones were revealed by technical predictions.
$ETH price structure”>
$ETH Price structure: TradingView
If Ethereum moves above $2,140, expectations for a pattern breakout will increase. Although the neckline is still far away, expectations for a 17% rally towards $2,600 will emerge. This upside potential may explain why traders continue to open long positions despite rising red flags.
However, this optimism depends entirely on whether Ethereum maintains its support level. Once Ethereum falls below $1,990, the pattern is still there, but the weakness begins to increase.
A fall below $1,890 will be even more severe. This level sits directly at the top of the cost-based cluster between $1,870 and $1,890. Losing this zone would weaken holder confidence and expose Ethereum to even more severe decline.
The bullish structure will start to break down below $1,820. If Ethereum falls below $1,790, the cup and handle pattern will be completely invalidated. This could eliminate the bullish setup and trigger a large scale liquidation.
Ethereum Price Analysis: TradingView
This is why the same price structure that attracts $1 billion bullish bets sits directly above the most dangerous breakdown zone. Recovery is still possible. However, Ethereum needs to break above $2,140 first. Until then, Ethereum remains caught between the hope of a breakout and the risk of a breakout.
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