Ethereum at Risk of $2,200 Drop Despite Strong On-Chain Activity
Ethereum is currently facing a critical juncture, with the potential for a significant drop looming if it fails to break out above a key resistance level. Trader Carl Moon has pointed out a long-standing ascending triangle formation on the charts, warning that a breakdown could lead to a sharp decline to $2,200, representing a 14% correction from its current levels.
“ETH has a high chance of falling to $2,200 if it fails to break through this ascending resistance,” Carl tweeted, referencing the $2,700 cap that has repeatedly halted rallies since early May. The price action has struggled to convincingly breach this resistance line, resulting in lower highs and a growing bearish momentum.
Despite the technical caution, Ethereum’s on-chain metrics are showing impressive growth. Analyst Gordon highlighted data indicating a parabolic increase in weekly engagement across the Ethereum ecosystem. With over 17.4 million unique active addresses in a single week, a substantial portion of users is also active across multiple Layer 2 chains. The year-over-year growth of Ethereum’s scaling layers is at 7.5x, indicating a surge in real-world usage.
“Activity on ETH is going parabolic,” Gordon noted. This surge in active users, especially across L2s, signifies that Ethereum’s fundamentals are strengthening, potentially setting the stage for sustained growth despite short-term price fluctuations.
The Ethereum market is currently at a crossroads, balancing short-term volatility against long-term momentum. While technical indicators suggest a possible correction if resistance continues to hold, the robust network activity implies that underlying demand could soon outweigh bearish signals.
The key question now is whether the strong ecosystem growth can absorb a potential sell-off and transition resistance into support, or if the market will need one final flush before taking off. Traders are closely monitoring the $2,700 resistance and $2,200 support levels, as a decisive move in either direction could dictate Ethereum’s next major move.
As Ethereum navigates these critical levels, the market remains on edge, waiting to see whether technical barriers or fundamental strength will ultimately guide its path forward. The interplay between price action and network engagement will determine whether Ethereum is poised for a sustained rally or if further consolidation is necessary before a significant breakout.
