ethereum Faces Structural Shift After Rejection at $2,550

ethereum‘s Struggle with Key Resistance Levels

ethereum‘s recent inability to hold above the $2,550 mark has led to a significant change in its market structure. The failure to maintain this high-resistance level has resulted in multiple candle closes beneath it, indicating that the previous bullish breakout was merely a false signal—a classic bull trap. This rejection was not an isolated event; it occurred within a critical confluence zone that included the 0.618 Fibonacci retracement level, notable dynamic resistance, and the upper boundary of the recent trading range. As a result, the bearish sentiment has gained traction, establishing clear downside targets.

Currently, ethereum is hovering around $2,490, reflecting a decline of approximately 3% from the rejection point. The inability to stay above $2,550 has transformed this level into a formidable resistance. Although there was a brief surge into the $2,650 range earlier in the week—aligned with the yearly volume-weighted average price (VWAP)—the rejection was rapid, and trading volume has diminished as the U.S. market enters a holiday period.

$2,226: A Key Support Level for ethereum

Attention now turns to the $2,226 support level, which serves as both a local low and a significant liquidity zone. Over the past month, price movements have consistently gravitated toward this area following unsuccessful breakout attempts, making it a focal point for buyers. Should ethereum fail to stabilize above the $2,400 mark—a crucial horizontal support that has seen strong buying activity in three separate four-hour attempts—downward pressure could intensify, pushing the price toward the $2,226 level.

The Relative Strength Index (RSI) currently stands at 45.9 on the four-hour chart, showing a downward trend from previous overbought conditions, while the MACD momentum is diminishing. A decisive breach below $2,400 could lead traders to anticipate a swift decline to $2,226, which may serve as a support retest before any potential bullish recovery.

Institutional Inflows: A Potential Game Changer for ethereum

While short-term price dynamics appear fragile, institutional investments are quietly establishing a bullish foundation. In June, ethereum ETFs attracted $1.17 billion in inflows, with an additional $149 million recorded on July 3rd, led by Fidelity’s FBTC at $237 million. Analysts like Bitwise’s CIO Matt Hougan predict total inflows could exceed $10 billion in the latter half of 2025, positioning ethereum as a cornerstone of global tokenized finance.

These inflows are not mere speculative chatter; they reinforce the narrative of ethereum as the foundational layer for tokenized real-world assets (RWAs). Robinhood’s recent announcement to launch up to 200 tokenized stocks on ethereum’s Arbitrum Layer 2 further solidifies this narrative. The growing institutional confidence in ethereum is rooted in fundamentals rather than hype.

Technical Outlook: Potential for Breakout Toward $2,800

ethereum is currently caught between a well-defined support at $2,400 and a resistance ceiling at $2,535. The repeated rejections at the $2,535 level—evidenced by strong wicks and bearish engulfing patterns—heighten the stakes for bullish traders. However, a successful reclaim and close above $2,535 could reignite bullish momentum, targeting the $2,600 and $2,732 levels, which align with previous rally imbalances and are supported by rolling VWAP clusters.

The longer ethereum remains below $2,535 without breaking down past $2,400, the more likely a breakout becomes. Technical buyers will be looking for a high-volume reclaim of this resistance, with the RSI needing to rise above 55 to confirm renewed momentum. Until such a breakout occurs, the market structure remains susceptible to further declines.

Daily Chart Analysis: Bullish Flag Pattern with High Targets

Taking a broader view, ethereum‘s daily chart presents a contrasting narrative. A falling wedge breakout earlier this quarter has evolved into a tight bullish flag structure. The measured move target from this flag pattern suggests a potential surge toward the $4,300–$4,500 range, contingent on ethereum reclaiming and maintaining levels above $2,650 in the coming weeks. The MACD indicator remains positively aligned, and the RSI has consistently bounced off the 50 midline, signaling underlying bullish strength.

Despite recent selling pressure, the Balance of Power (BoP) indicator is gradually shifting in favor of buyers. These developments suggest a macro-accumulation phase, with high-net-worth wallets and institutions steadily absorbing market dips.

Relative Strength: ethereum‘s Performance Against Bitcoin

ethereum‘s relative performance against Bitcoin is another critical indicator. The ETH/BTC pair has broken out of a descending channel and is showing early signs of a bullish trend. This shift may indicate a market preference returning to smart contract platforms, driven by increasing interest in tokenized finance, staking yields, and real-world asset integration.

This relative strength supports the argument for a near-term recovery in ethereum once the broader market consolidation concludes. Historically, a rising ETH/BTC ratio has preceded phases of altcoin outperformance.

Conclusion: Cautiously Optimistic for ethereum

Considering the combination of ETF inflows, the rise of RWAs on ethereum, and a favorable macro-structure on higher timeframes, ethereum remains a Buy on deeper pullbacks toward the $2,226–$2,400 range. However, traders should exercise caution if the $2,400 level fails to hold, as this could lead to accelerated declines toward $2,200 or even below $2,000.

Conversely, reclaiming $2,535, and particularly $2,650, would signal bullish continuation toward $2,732, with the potential for a breakout toward the long-term flag target of $4,300–$4,500. If Bitwise’s $10 billion inflow projection materializes, the ETH-USD pair may eventually aim for $10,000, supported by technical, fundamental, and rotational flows. For now, the critical range to monitor remains between $2,226 and $2,535, with a close watch on volume shifts and order book activity around these levels.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.