Ethereum (ETH) is under renewed selling pressure as both technical indicators and on-chain data turn bearish. Analysts caution that if the current trend persists, ETH could break below the $2,000 level in February and potentially test the $1,700 zone.
Inverse Cup-and-Handle Forms, Raising Downside Risk
Yashu Gola, an analyst at Cointelegraph, identifies that ETH is forming an inverse cup-and-handle pattern — a classic bearish signal. The pattern consists of a rounded top followed by a brief recovery consolidation, then a decisive break below a key neckline. ETH already broke the neckline near $2,960 in January, and after a failed retest, resumed its decline, confirming the breakdown.
Moving Average Resistance Reinforces Bearish Outlook
Technically, ETH's recent bounce stalled beneath the 20-day and 50-day exponential moving averages (EMAs), indicating persistent overhead supply. The measured downside target of the inverse cup-and-handle pattern sits around $1,665, implying a potential 25% decline from current levels. Historical data suggests the pattern has a relatively high success rate in hitting its target.
On-Chain Data Aligns, MVRV Zone Points to Support
On-chain metrics echo the technical warning. Ethereum's MVRV (market value to realized value) extreme deviation zone shows the lowest support band near $1,725, overlapping with the technical projection. In past correction cycles, such as 2025 and 2018, ETH bottomed out after testing or briefly dipping below this MVRV range, followed by notable rebounds.
Macro Headwinds Add to Pressure
Broader macroeconomic uncertainty adds to Ethereum's burden. Some market participants fear the crypto market may be entering another “four-year cycle” correction phase, with cautious sentiment toward 2026. Concerns about a potential AI bubble are also driving capital toward defensive assets, leaving risk assets like cryptocurrencies vulnerable in the short term.
Overall, technical patterns, moving average structures, and on-chain valuation metrics all point to a cautious short-term outlook for Ethereum. Analysts suggest that only a further drop to the $1,700 area would allow the market to gauge whether a genuine bottom and recovery signal can emerge.