Analyst: ETH still faces downside risks and may find it difficult to break above $2,400 in the short term

According to Odaily, CryptoQuant analyst BorisD pointed out that Ethereum still faces significant downside risk. The combination of rising exchange supply and continued ETF outflows could push the price back down to around $1,700, implying about a 20% correction from current levels. A breakout above $2,400 may be difficult in the near term.

Data shows that recently, ETH reserves on a certain exchange have increased significantly, rising from about 3.36 million to 3.84 million between May 5 and May 9. This suggests that more tokens are flowing into trading platforms, which is often interpreted by the market as a signal of potential selling pressure. At the same time, US spot Ethereum ETFs saw net outflows for four consecutive trading days, totaling about $190 million, highlighting weakening marginal institutional demand.

In terms of price movement, although ETH rebounded approximately 40% from its recent low, it encountered strong resistance near $2,400 and subsequently fell back to the $2,260 zone, with limited short-term upward momentum. CryptoQuant analysts noted that as exchange inflows accelerated, the price failed to continue its upward trend and instead pulled back, indicating the market may be in a “coexistence of absorption and distribution” phase.

From a technical perspective, ETH has broken below the lower edge of the ascending wedge structure (around $2,280). If this breakdown is confirmed, the pattern projects a target price near $1,725, corresponding to a potential decline of about 22% and coinciding with the macro low area seen in early February. Some analysts further believe that if the larger bear flag structure persists, ETH risks falling toward $1,280.

Overall, market sentiment remains generally cautious, with most considering the current rebound as more likely a phase within a distribution process rather than a signal of trend reversal. Short-term volatility risk remains elevated. (Cointelegraph)