Ethereum Faces Bearish Risks as Double Top Pattern Emerges

Ethereum (ETH) is flashing potential warning signals as a double top pattern forms on the daily chart, raising doubts about the sustainability of its recent rally. After testing resistance near $2,700 twice and failing to break higher with strong volume, ETH has pulled back to around $2,475, now resting on the crucial 200-day EMA.

This double top setup—defined by two similar peaks separated by a trough—could signal a bearish reversal if the neckline at $2,400 is breached. Momentum indicators are turning cautious. The Relative Strength Index (RSI) has dropped from overbought territory above 70 and now sits at 58.9, hinting at weakening bullish strength and rising selling pressure.

Volume trends further support this bearish outlook. Trading activity has declined since ETH’s initial breakout above $2,300 in early May, showing reduced buyer participation during the recent uptrend. Historically, such divergences between price and volume often precede breakdowns rather than breakouts.

If Ethereum fails to hold the $2,400–$2,450 support zone, the next key level lies near the 200 EMA around $2,300. A break below this would invalidate the early May rally and potentially open the door to deeper corrections, targeting $2,200 or even $2,000 in the weeks ahead.

This weakness is reflective of a broader altcoin struggle as Bitcoin maintains dominance in the market. While ETH's longer-term outlook remains fundamentally strong, its short-term technicals suggest caution. Traders should closely monitor the $2,300–$2,400 range; a decisive move below could trigger accelerated downside momentum. As Ethereum teeters on key support, the coming days may determine whether bulls can reclaim control—or if bears will drive the next move.