Ethereum, Red Flag for Early Collapse Below $2,000..."Likely to Wipe Out Recently Entered Traders"

▲ Ethereum (ETH)

Ethereum (ETH) price failed to recover and returned to a critical support zone. As the downward momentum strengthens, the possibility of an early collapse below the psychological support level of $2,000 has increased. This is the result of recent recovery attempts being thwarted after encountering resistance multiple times around the 100-day and 200-day moving averages.

According to U.Today, a cryptocurrency specialized media outlet, on May 20 (local time), Ethereum's converging bearish structure broke downwards, causing it to fall below several short-term support levels. Currently, Ethereum is trading near $2,100, and momentum indicators suggest that selling pressure still dominates the market.

The Relative Strength Index continues to decline and is currently staying below the neutral zone, indicating weakening buying pressure. Additionally, trading volume remains relatively low during attempted bounces, suggesting that traders are hesitant to actively accumulate Ethereum at current price levels.

One of Ethereum's biggest problems currently is the overall market weakness. As Bitcoin (BTC) entered a correction after being rejected near a major resistance level, Ethereum is reacting more strongly to the market downturn. When Bitcoin loses momentum, leveraged positions across the altcoin market are quickly liquidated, adding pressure to Ethereum.

The technical structure is also fragile. Ethereum is still trading significantly below its long-term 200-day moving average, located around $2,550. Until Ethereum decisively recovers this level, the overall trend favors sellers.

If selling pressure accelerates, the $2,000 area becomes the most crucial short-term support level. If this zone breaks, it could trigger panic selling and cascading liquidations, particularly among traders who entered during the recent rebound phase expecting a larger recovery rally.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*