Ethereum price risks drop to $1,800 as ascending channel breaks

Ethereum price has broken down from an ascending parallel channel pattern on the daily chart — May 21

Momentum indicators are also deteriorating. The MACD histogram has flipped negative while the MACD line continues crossing below the signal line, confirming growing bearish momentum on the daily timeframe. Previous bearish crossovers on the same chart structure earlier this year preceded extended downside moves.

The immediate support zone now sits near $2,080. Failure to hold this area could expose Ethereum to a rapid move toward the $1,800 region, which aligns with previous consolidation support formed during March and April.

Some technical traders have also warned that Ethereum is now trading below several major exponential moving averages, strengthening the probability of further downside continuation. A confirmed daily close below the channel support could invalidate the entire April recovery structure.

Derivatives positioning adds another layer of risk. CoinGlass liquidation data shows a dense concentration of leveraged long positions sitting between $2,040 and $2,000. If Ethereum breaks decisively below that zone, forced liquidations could amplify downside volatility.

According to CoinGlass estimates, more than $1.70 billion worth of leveraged long positions could face liquidation pressure if ETH falls below approximately $2,044. Such liquidation cascades often trigger rapid flash crashes as exchanges automatically close overleveraged positions in declining markets.

Funding rates across several major perpetual futures exchanges have also started turning negative, indicating growing bearish sentiment among derivatives traders. Negative funding rates generally suggest short sellers are becoming more aggressive while bullish positioning weakens.

Open interest has simultaneously declined from recent highs, signaling that traders are reducing exposure rather than aggressively buying the dip. Falling open interest during price declines often points to weakening market confidence and fading speculative demand.

What could invalidate the bearish Ethereum thesis？

Despite the deteriorating technical structure, several developments could still prevent Ethereum from sliding below $1,800.

A rebound in spot ETF demand would likely improve market sentiment quickly. Institutional inflows previously helped stabilize ETH during earlier corrections, particularly when BlackRock and Fidelity products experienced strong subscription growth.

Cooling inflation data could also ease pressure on risk assets. Softer U.S. PCE or CPI readings may reduce Treasury yields and revive expectations for Federal Reserve rate cuts later this year. Lower yields generally improve liquidity conditions for speculative markets, including cryptocurrencies.

Geopolitical developments remain another important variable. Oil prices recently stabilized after renewed diplomatic discussions involving Middle East trade corridors and shipping routes. Any major decline in crude prices could improve global risk appetite and reduce inflation concerns that have pressured crypto markets.

Technically, Ethereum would need to reclaim the $2,230 to $2,280 resistance zone to invalidate the immediate bearish setup. A successful recovery above the broken channel support could trap short sellers and potentially trigger a relief rally toward the $2,500 region.

Crypto trader Michaël van de Poppe recently argued that Ethereum still retains long-term upside potential despite short-term weakness. “As long as ETH holds above the macro support region, the bull cycle structure remains intact,” he said in a market update shared on X.