Ethereum (ETH) Price Prediction: Correction Phase May Be Limited in Scope

Ethereum price has entered a correction phase after testing the $2,800 level, but market data suggests the pullback may be limited in scope.

Ethereum price has entered a correction phase after testing the $2,800 level, but market data suggests that the pullback may be limited in scope.

The cryptocurrency found support at $2,460 and began a fresh increase toward higher levels. During this upward move, ETH managed to recover above the $2,500 and $2,520 resistance zones.

The bulls pushed the price above the 38.2% Fibonacci retracement level of the downward move from the $2,730 swing high to the $2,463 low. However, the bears became active again near the $2,600 resistance zone.

The price failed to clear the $2,600 level and reacted to the downside. Ethereum is now trading again near the $2,550 level. It's also the 100-hourly Simple Moving Average.

Technical analysis reveals that the price broke through a connecting bullish trend line with support at $2,555 on the hourly chart. This development suggests that the momentum might be weakening in the short term.

At the same time, recent on-chain data from Tipranks shows that a large ETH whale wallet deposited 10,195 tokens, valued at $25.67 million, to the Kraken exchange.

Typically, such moves indicate an intent to sell, which could exert downward pressure on prices.

Additionally, the correction from $2,800 was influenced by a rise in Taker Sell Volume. This metric tracks the volume of market sell orders and provides insight into selling pressure.

However, despite this selling activity, longer-term data shows that buyers have remained dominant over extended periods.

The spot taker CVD metric, which tracks the cumulative difference between market buy and sell volume over three months, remained green and rising in May. This indicates that taker buy orders were dominant throughout the month.

The data suggests that despite cooling volume, buyers still controlled the market during the recent rally.

Moreover, an analysis of retail trading patterns reveals that the recent recovery to $2,800 did not trigger the intense activity usually seen at market tops.

Historical data from March 2024 and December shows that local tops were accompanied by heightened retail trading activity, signaled by surges in trading volume, open interest, and futures volumes.

The absence of this frenzied activity during the recent rally suggests that Ethereum may still be in the early stages of its bullish phase.

The quick recovery from $1,700 to $2,800 since April was accompanied by reduced trading volume compared to the December 2024 and March 2024 rallies. This indicates less urgency in the market.

Finally, profit-taking activity has not increased dramatically, which analysts view positively for future price action.

Looking at the resistance levels, ETH could face initial resistance near the $2,580 level. The next key resistance sits at $2,600, close to the 50% Fibonacci retracement level of the downward move from the $2,730 swing high to the $2,463 low.

If the bulls can push through these levels, then the first major resistance appears near the $2,650 zone. A clear move above this zone might send the price toward the $2,720 resistance.

On the downside, the first major support zone is located at $2,520.

A move below this support might push the price back toward the $2,460 support level. Further losses could target the $2,420 support zone.