Ethereum slipped nearly 1% over the past 24 hours, but the bigger story is the sharp reversal that followed its recent breakout. After mid-January optimism, ETH has now corrected by almost 16%.
Earlier this month, Ethereum broke out of an inverse head-and-shoulders pattern, a setup that usually signals further upside. Momentum improved, whale buying increased, and the price moved above a key level.
However, the rally stalled near a major supply zone. Data shows a heavy cost-basis wall between $3,490 and $3,510, where over 1.19 million ETH were previously bought. This represents more than $4 billion in potential selling pressure.
As ETH approached this zone, many holders appeared to sell to break even. The selling pressure near $3,407 was enough to stop the rally and push prices lower, turning the breakout into a classic bull trap.
Whales added to the move by buying after the breakout. Large holders increased their balances by about 1.04 million ETH, worth close to $3 billion. Despite this, their buying could not overcome the strong supply overhead.
At the same time, Ethereum ETF flows turned negative. After strong inflows helped fuel the breakout, the following week saw net outflows of more than $611 million, adding extra pressure on price.
Ethereum is now back inside its previous trading range. On the downside, the key level to watch is around $2,773. A daily close below this area would confirm the failed breakout and increase downside risk.
On the upside, ETH needs to reclaim $3,046 to stabilize. A stronger recovery would require a move above $3,180, while the major resistance near $3,400 still stands as the biggest hurdle for any renewed rally.
