Ethereum Price Analysis: Descending Channel Dominates as ETH Tests Demand Zone

Ethereum remains in a cyclical downswing after the recent capitulation leg that drove the price from the mid-$2,000s into the $1,800 demand region. The structure across higher timeframes is still dominated by a well-defined descending channel, with lower highs since late 2025 and momentum readings in oversold territory now attempting to stabilize.

Current conditions, therefore, reflect a market in the process of digesting a sharp repricing, where the next impulse will likely be defined by how the price reacts to the nearest resistance band around $2,700 and the reclaimed support zone near $1,800–$2,000.

Ethereum Price Analysis: The Daily Chart

The daily chart shows Ethereum trending within a broad downward channel, with the latest sell-off driving the asset into the lower boundary and the horizontal demand region between roughly $1,800 and $1,700. This zone has produced an initial reaction, but the sequence of lower highs and lower lows remains intact, and the bearish fair value gap around $2,300–$2,400 now acts as the first short-term resistance cluster.

Daily RSI has also bounced from deeply oversold readings but still resides in a bearish regime, indicating that any recovery for now is best classified as a corrective rebound within a dominant downtrend. Yet, a sustained move back above $2,400–$2,500 and the channel midline would be required to argue for a more durable trend change.

ETH/USDT 4-Hour Chart

On the 4-hour timeframe, the market displays a short-term basing attempt after the steep decline. The price carved out a descending leg that terminated near the $1,800 demand zone while the 4-hour RSI formed a clear bullish divergence, signalling seller exhaustion and prompting the current consolidation above the support zone at $1,800 and below the resistance level at $2,100.

This range now defines the tactical battlefield: holding above $1,800 would keep the developing recovery structure valid and open the door for a retest of the $2,200 short-term resistance level, whereas a decisive breakdown below $1,800 would indicate that the relief phase has failed and expose the lower daily supports closer to $1,600.

On-Chain Analysis

The Exchange Supply Ratio for Ethereum has continued to trend lower and currently sits near the lowest levels of the displayed series, around 0.135, implying that an increasingly smaller fraction of the total ETH supply is held on centralized exchanges. This persistent decline, even as prices have sold off toward the $2,000 area, suggests that a significant portion of the supply has migrated to self-custody or staking and is less immediately available for sale, reducing structural spot sell-side liquidity.

In the short term, this configuration can amplify volatility, with sharp downtrends driven by derivatives and forced selling facing relatively thin spot order books. But from a medium-term perspective, a depressed exchange supply ratio combined with already realized downside often characterizes late-stage phases of a corrective cycle, where additional marginal supply becomes progressively harder to source if demand begins to recover.

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