Ethereum's price is rising again. It has increased by more than 2% in the past 24 hours and continues to show a positive trend this month. The rebound is encouraging, but the underlying structure remains unstable.
The bearish pattern remains valid. If the key support level is not defended, this rebound could lead to deeper corrections.
Ethereum rising within a weak downtrend structure
Ethereum has rebounded, but on the daily chart, it is still moving within a head and shoulders pattern. The high on January 6 formed the right shoulder, and the price is attempting to establish a bottom while not invalidating the structure yet.
This is important because the head-and-shoulders pattern often collapses gradually rather than failing immediately. Rallying can still occur within this range, but we cannot feel safe unless the price clearly breaks away from the neckline risk zone. For Ethereum, this is around $2,880. For ETH, the price must clearly break above this range.
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Short-term holders' behavior warrants attention. The short-term holders' net unrealized profit/loss (NUPL) indicator tracks profit and loss status. Although they are still in the selling zone, the indicator has risen to its monthly peak. If prices go higher, the likelihood of profit-taking increases.
Looking at the HODL wave measurement indicator, we can see that many short-term holders have already exited the market, as the data distinguishes groups by period. This suggests that NUPL risk has already been significantly reflected.
The supply ratio of holders with 1 week to 1 month of holding has dropped sharply from around 11.5% in mid-December to about 3.9% currently.
This reduces short-term selling pressure. It also means this rebound has not been triggered by aggressive or speculative new demand. While short-term buying pressure may appear weak, if additional support holds, this could actually help push Ethereum's price higher. ETH prices could see further upside.
Prices are rising while support is weakening… be cautious of a sharp drop
Ethereum hasn't declined because of strong support at the bottom.
The Money Flow Index (MFI) tracks low-price buying, showing bullish divergence. From mid-December to early January, Ethereum's price reached lower highs, yet the MFI recorded higher highs. This indicates that low-price buying has occurred. It means investors have consistently bought during the correction phase without abandoning their positions.
Although the MFI has slightly declined, it remains above the previous low. If this condition continues, selling pressure will not spike sharply and will instead be absorbed steadily.
Long-term holders are also reinforcing this support. The supply ratio of holders with 6 to 12 months of holding has increased from about 14.7% at the end of December to 16.2%. This reflects steady accumulation rather than speculative chasing.
Short-term supply reduction, continuous low-price buying, and long-term holders' accumulation explain why Ethereum has moved toward a rebound rather than a decline.
However, support alone does not eliminate risk. It only slows down the rate of decline.
Key price range for sustaining Ethereum's rebound
Ethereum is currently at a clear crossroads of directional change.
The most critical support level is $2,880. This point lies within the neckline of the head-and-shoulders pattern. If the daily close breaks below this level, the entire pattern activates, opening the potential for a drop of about 20%, measured from the head to the neckline.
Above this price, the first key zone is between $3,090 and $3,110, averaging $3,100. This range can be confirmed on the chart. This area is extremely important because approximately 1.44 million ETH were last exchanged at on-chain cost levels concentrated here. Markets often react strongly at such levels.
If Ethereum holds support above this range, buying pressure will strengthen, defending the cost basis and absorbing sell-offs. If this level is not held, downward pressure will intensify toward $2,970, followed by the critical $2,880.
To completely neutralize the bearish structure, Ethereum must sustain strong momentum above $3,300. Breaking above $3,440 will completely eliminate the risk of the head-and-shoulders pattern.
