Ethereum (ETH/USD) has encountered strong resistance at the psychologically significant $2,500 area of interest, with the cryptocurrency failing to sustain its rally above this critical threshold after a bearish divergence materialized.
The rejection from the $2,519.51 high has confirmed a bearish divergence pattern that had been building across multiple timeframes, suggesting that the recent bounce may have been a corrective move within a larger downtrend rather than the start of a meaningful recovery.
Currently trading at $2,428.67, Ethereum appears to be setting up for another leg lower as technical indicators align to support the bearish thesis. The failure to break through the $2,500 resistance zone has validated this level as a significant area of interest where institutional sellers have been positioned, creating a formidable ceiling for any near-term recovery attempts.
Ethereum Recovery Struggles
The most compelling aspect of Ethereum’s current technical setup is the pronounced bearish divergence visible across key momentum oscillators. While price managed to approach the $2,500 resistance zone, both the stochastic and MACD indicators failed to confirm new highs, instead showing progressively weaker readings that suggest underlying momentum deterioration.
The stochastic oscillator has been forming lower peaks even as price attempted to challenge previous highs, creating a classic bearish divergence pattern that often precedes significant corrections. This divergence has now been confirmed by the failure to break above the $2,500 resistance, lending credibility to the bearish scenario.
MACD histogram readings have similarly failed to confirm the price advance, with momentum readings remaining subdued despite Ethereum’s rally attempt. The momentum oscillator’s inability to generate positive divergence signals that the recent bounce lacked genuine buying conviction and was likely driven by short covering rather than fresh institutional demand.
Downside Fibonacci Targets
With the $2,500 resistance zone holding firm, Ethereum’s focus now shifts to key downside targets that align with Fibonacci retracement and extension levels. The immediate support lies at the 38.2% retracement level of $2,223.84, which represents the first line of defense for any remaining bulls.
A breakdown below this initial support would likely trigger accelerated selling toward the 50% Fibonacci level at $2,132.50, a psychologically important area that has historically attracted institutional accumulation. However, given the strength of the bearish divergence signals, even this level may provide only temporary relief.
The more significant downside target sits at the 61.8% retracement of $2,041.17, which would represent a measured correction from the recent highs. This level aligns with previous consolidation zones and could serve as a more substantial floor for any potential bottoming process.
Should selling pressure intensify beyond expectations, the 76.4% Fibonacci level at $1,928.17 then the full extension at $1,745.50 comes into play as extreme downside scenarios. While such a deep correction would be severe, bearish divergence patterns combined with resistance rejections often produce more substantial moves than initially anticipated.