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Ethereum has recorded a decline of almost 1% in the last 24 hours. Consider that this move alone is not important, but what matters is what happened before.
In mid-January, Ethereum recorded a breakout from a clearly defined head and shoulders reversal pattern. The setting seemed constructive. Momentum improved, whales began to buy, and the price crossed a major structure. Under normal conditions, this combination supports the continuation of the trend.
Instead, Ethereum stopped near a critical wall and then corrected lower by about 16%. Consider that this failure was no accident. A wall of supply worth about $4 billion has quietly absorbed the supply, turning the clash into a classic bull trap.
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A match that pushed straight towards the $4 billion mark
The inverse head and shoulders pattern for Ethereum started to form in late October. The meeting was confirmed on January 13, when the price of eth pushed above the neck and continued to grow with confidence.
Note that this move did not fail because the buyers disappeared.
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The failure is due to the price in front of a heavy wall in the cost of purchase.
Purchase cost data indicate a wide range of Holders of Ethereum Between $3,490 and $3,510. About 1,190,317 eth have been accumulated in this area. At an average price close to $3,500, this represents about $4.1 billion in supply.
A purchase cost wall is formed when a large amount of eth has previously been purchased within a narrow price range. When the price returns to or even approaches that area, holders often sell to spread it. This type of initial distribution creates strong resistance, even if the mood seems bullish.
It happened right near $3,407, where selling forces pressured and frustrated the breakout attempt.
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Ethereum pushed hard against the wall, stopped and retreated. The breakout technically only lasted for a moment, but the market structure was already threatened. The very large display was at the top. A core group was arrested during this operation!
The whales bought the pirate – and fell into the trap
What makes this scenario even more dangerous is that the ETH whales have done “the right thing”.
From January 15th (after the hack was confirmed), the big holders continued to increase their exposure. The balance of whales increased from about 103.11 million ETH to 104.15 million ETH, an increase of 1.04 million ETH or close to $3 billion.
This buying continued even when the price started to fall, showing a clear average behavior.
The whale accumulation process seemed self-sustaining. But this time, it wasn’t enough.
The reason for this was an off-chain behavior, as the ETF flows suddenly reversed. The week ending January 16 saw a strong influx, which helped sustain the clash. The following week, ending January 23, there was a net outflow of $611.17 million from ETFs.
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This change had a clear impact. The sale of ETFs added immediate pressure, at the same time that Ethereum was experiencing a strong wall of supply. Buying whales met resistance there. Even the big holders were effectively above the support while the price of Ethereum fell further.
This explains why the correction continues despite the accumulation. There was demand, especially from whales, but the supply was stronger. The wall won. When ETF flows match average resistance, the price structure collapses quickly.
Ethereum price levels that determine what happens next
Get back into Ethereum to the previous range, and the structure has become weaker.
He identified the $2,773 level as the critical level, and then highlighted it on the Ethereum price chart.
Explain that a close day below this zone will break the right shoulder of the head and shoulders pattern and fully confirm the bull trap. He added that the move also puts the base cost cluster from $2,819 to $2,835 at risk.
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He emphasized that although this area has a strong demand capable of absorbing the selling pressure, its loss exposes Ethereum to an accelerated decline.
The structure weakens rapidly below that level. On the other hand, recovery must be phased.
He said that first, Ethereum needs to recover the level of $ 3,046. This will stabilize the price, but it is not enough. The real test is at $3,180, which flips the supply wall between $3,146 and $3,164. He noted that a breakdown of that zone would indicate a return to real demand.
Even so, resistance remains strong. The biggest selling wall around the $3,407-$3,487 area continues to dominate the chart. It is considered the same area that rejected the encounter and caused the correction.
Wait until you get up ethereum Clearly above these levels, demonstrations remain at risk. The main points of the article are simple.
He explains that Ethereum did not fail because of weak buyers. I fail because she makes a huge offer. Until that changes, the bull market trap remains effective.
