After breaking a fundamental support zone at 2,880 dollars, Ethereum finds itself at a technical crossroads that has activated a bearish “head-and-shoulders” structure. According to analysis of the daily chart on January 26, 2026, this formation suggests an Ethereum price projection with a 20% downside risk, which could drive the asset’s value toward the 2,290 dollar mark if selling pressure intensifies.
Despite this grim outlook, the asset has shown signs of resilience by rebounding near 2,780 dollars. This movement has been fueled by an influx of fresh capital seeking to take advantage of discount levels, attempting to transform the bearish breakout into a “bear trap.” On-chain data technology reveals that the success of this rebound will depend on buyers’ ability to absorb the supply in the coming sessions.
Additionally, a notable shift in market participant behavior has been observed. While high-volume wallets (whales) have shown caution by selling on small rallies, investors with a 6-to-12-month outlook have increased their accumulation. This group of high-conviction holders has gone from controlling 17.23% to 18.26% of the supply, acting as a cushion against extreme volatility.
Massive liquidations and key levels for a possible short squeeze
On the other hand, the derivatives market presents a saturation of short positions that could change the current dynamics. On platforms like Binance, there is a short liquidation exposure exceeding 1.6 billion dollars. If the price manages to break above 3,020 dollars, a “short squeeze” would be triggered, forcing bearish traders to buy back the asset and accelerating an unforeseen recovery.
Similarly, retail investor sentiment remains tense, as capital flow into the Ethereum ecosystem continues to be the primary driver of current stability. The short-term Ethereum price projection is tied to the 3,270 dollar zone; surpassing this level would eliminate immediate downward pressure and allow the asset to regain its bullish trend prior to the formation of the current pattern.
Is a crash toward 2,300 dollars imminent?
Since the technical structure has not yet been invalidated, the risk of a free fall remains present. In this way, if the 2,780 dollar support is breached again with volume, the probabilities of reaching the bearish target would increase drastically. Analysts warn that the lack of aggressive institutional buying at these levels is the main obstacle to a full price reversal.
Finally, Ethereum is caught between a dangerous chart structure and a market positioning that favors a violent rebound. It is expected that if accumulation by long-term holders continues to outweigh selling by speculators, the asset can invalidate negative forecasts and establish a solid base for the rest of the quarter.
