Ethereum risks a deeper pullback toward the $2,500–$2,200 region as key on-chain support weakens and a bearish pennant looms over the market.
ETH extends its three-month decline
Ether (ETH) continued sliding into December after losing roughly 30% over the past quarter, amplifying concerns about how far the correction may extend into year-end.
MVRV suggests $2,500 could be next
ETH retested its −0.5σ MVRV deviation band — currently hovering around $2,820–$2,830 — for the second time in a week, according to Glassnode.
The MVRV bands compare spot price with the cost basis of holders and often pinpoint important support and resistance zones during market cycles.
Historically, the −0.5σ band has served as a mid-cycle support during downtrends. In March, ETH’s close below this level preceded a 40% drawdown as price slid toward the realized price band.
A clean breakdown below the −0.5σ level would again shift focus toward the realized price near $2,500 — a zone that has repeatedly acted as a gravitational target during corrections.
Bearish pennant points to a potential 20% drop
On the daily chart, Ether’s price has tightened into a bearish pennant, a continuation pattern that typically resolves lower after a sharp decline.
A confirmed breakdown of the pennant pattern would imply a measured move toward the $2,200–$2,220 range — about 20% below current levels.
This area aligns with the 0.786 Fibonacci retracement of the 2025 rally and a prior demand pocket from April.
The same region also converges with the projected bottom of a falling wedge pattern highlighted by analyst Dom, suggesting ETH could form a local December low around $2,200–$2,220.
Bullish wedge scenario: $3,550 remains possible
Despite the prevailing bearish structure, the falling wedge pattern leaves room for a bullish reversal.
A decisive breakout above the wedge’s upper boundary opens a potential climb toward $3,550 going into early 2026.
This upside target aligns with forecasts from several analysts who view ETH as undervalued based on longer-term valuation models — some projecting a return above $4,000 once market conditions stabilize.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.