Ether (ETH) rebounded by 40 percent from multi-month lows below $1,800 to challenge the key $2,400 resistance level. However, market analysts are now warning that the recent recovery has lost steam and that ETH once again faces considerable downside risks.
Rising exchange inflows and ETF outflows
Recent analysis suggests that Ether is vulnerable to renewed sharp declines. There has been a notable increase in the amount of ETH moving onto exchanges: from the start of May to May 9, ETH reserves on Binance wallets surged from 3.36 million to 3.84 million. Analyst BorisD highlighted that, during this period, ETH was unable to maintain upward momentum, with prices slipping 7 percent from $2,390 down to $2,260.
Such substantial transfers to exchanges are typically seen as advance preparation by major investors to sell their holdings. Another analyst, PelinayPA, stated that while short-term upward moves may occur, high volatility and the overall downtrend are likely to persist in the near future.
“These developments suggest that liquidity is being both absorbed and distributed within a specific range,” PelinayPA observed.
Additionally, demand for spot Ethereum ETFs has continued to weaken in recent days. Over four consecutive sessions, a total of $190 million flowed out of these funds. This wave of redemptions points to declining interest in ETH among US investors.
Technical outlook and key price targets
On the daily Ether chart, the emergence of a “rising wedge” formation has turned negative after the price slipped below $2,280. If daily closes persist beneath this level, technical analysis projects that selling could extend towards the $1,725 zone, the formation’s target. This would represent a 22 percent fall from current levels and would revisit lows set on February 6.
On a broader timeframe, analyst CryptoBullGod pointed to a “bear flag” pattern on the weekly chart, targeting a possible slide to $1,280 if selling pressure persists. This suggests further price weakness is on the table if current market trends continue.
According to CryptoAppsy data, Ether is now hovering at prominent technical support levels, with price action fluctuating close to these critical areas as traders monitor further moves.
General market sentiment
Many analysts interpret the rise in ETH exchange inflows and ETF outflows as indicators of impending selling activity rather than new accumulation. Historically, mass transfers of this kind have preceded sharp market drops—for example, after a similar pattern occurred in December 2025, ETH lost 42 percent of its value.
At present, both on-chain metrics and technical signals suggest that downside risks for Ether are prominent in the short term. However, some analyses observe that minor relief rallies may arise, though these are unlikely to spark a strong sustained bull market.
