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Ethereum Enters Final Correction Phase, Prepares for 15% Drop

Published
Valdrin Tahiri
Published
By Valdrin Tahiri
Edited by Insha Zia
Key Takeaways
  • Ethereum has dropped 15% since forming a lower high in January.
  • The price has been consolidating within a symmetrical triangle for over 1,150 days.
  • Will Ethereum break out of this long-standing pattern and reach new highs?

Ethereum (ETH) fell short of reclaiming its all-time high in 2024, even as many of its competitors surged past their previous peaks. A final rally in December pushed ETH to a yearly high of $4,107—still 16% below its record.

2025 has brought fresh challenges for the second-largest crypto.

ETH  has formed a lower high and is now breaking down from a key horizontal support level. While the recent decline is concerning, some indicators suggest this could be the final phase of the downward trend, potentially setting the stage for a rebound toward new highs.

Ethereum’s Precipitous Drop

Ethereum’s price has been on a downward trajectory since hitting its 2024 peak of $4,107 on Dec. 16.

After a brief recovery on Dec. 20, marked by a long lower wick that reaffirmed the ascending parallel channel, the cryptocurrency rallied to $3,744. However, the momentum faltered, resulting in a lower high, and ETH has been declining ever since.

Currently, Ethereum is on the brink of slipping back into the channel, which could worsen the ongoing correction. Should this occur, ETH might descend toward the channel’s midpoint, around $2,900.

With only some hours remaining until the daily close, Ethereum is forming a bearish candlestick under the crucial $3,290 horizontal support level, signaling a potential deeper drop.

Ethereum Decline
ETH/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

Technical indicators reinforce the bearish outlook.

Both the Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD) are declining and remain below their respective bullish thresholds of 50 and 0.

Additionally, the absence of bullish divergences suggests that a trend reversal is not imminent.

Overall, the daily time frame projects a bearish scenario for Ethereum, with a fall below $3,000 appearing increasingly likely.

Ethereum Correction Almost Over

Ethereum’s weekly outlook reveals that it has been correcting within a large symmetrical triangle (black) since its all-time high of $4,868 in November 2021. In the context of its long-term upward trajectory, this triangle is part of wave four of a larger rally that began in November 2018.

The formation of this triangle bears resemblance to XRP’s pattern, which led to a remarkable 400% breakout in 2024.

If Ethereum’s pattern follows suit, it could potentially reach a high of $7,432, marking the peak of wave five. This target aligns with the 1.61 external Fibonacci retracement level from the previous downturn.

Ethereum Count
ETH/USDT Weekly Chart | Credit: Valdrin Tahiri/TradingView

Short-term projections indicate that Ethereum still needs to complete the final leg of its decline. The minor sub-wave count (yellow) suggests a drop to the $2,826-$2,866 range. This would align the lengths of sub-waves A and C, bringing ETH to the 0.618 Fibonacci retracement support level.

ETH Short-Term
ETH/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

Once the correction concludes, Ethereum could embark on the next phase of its long-term upward movement, potentially driving it toward a new all-time high.

Final Drop Before New Highs

Ethereum created a lower high in 2025 and is breaking down from a minor horizontal support area. The price action and the wave count both point to more downside. If Ethereum completes its downward movement as predicted, it will reach a bottom near $2,826-$2,866. This is likely the final portion of a lengthy correction, after which a breakout and new all-time high are likely.

Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.
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