Ethereum, Is the 20% Rebound a Trap? Warning of a Drop to $1,000 Amid Long Term Holder Selling
Ethereum, Is the 20% Rebound a Trap? Warning of a Drop to $1,000 Amid Long Term Holder Selling
Ethereum (ETH) has rebounded more than 20% after a sharp drop in early February. However, warning lights have turned on that it could plunge further toward the $1,000 level as selling pressure from long-term holders overlaps with bearish technical patterns.
According to a digital asset outlet on February 9 (local time), Ethereum fell to a low of $1,740 on February 6 and has since attempted a recovery, rebounding about 23%. Yet analysis suggests this bounce is likely a temporary technical rebound within a downtrend rather than a move driven by strong buying demand. Analyst Ananda Banerjee noted that Ethereum is currently forming a bear flag pattern on the charts, which could foreshadow another downward wave.
On-chain data also signals elevated risk. The Short-Term Holder Net Unrealized Profit/Loss (NUPL) metric fell to -0.72, a capitulation level, in early February before recovering to around -0.47 with the recent bounce. This trajectory closely resembles the downturn in March 2025, when prices fell further to $1,470 after a premature rebound before establishing a true bottom. Assessments indicate it is still too early for the current improvement in sentiment to translate into a full dissipation of market fear.
In particular, the behavior of long-term holders is concerning. Tracking net position changes of investors holding ETH for more than 155 days shows that net outflows increased by 82%, from about 10,681 ETH on February 4 to roughly 19,399 ETH on February 8. This indicates that while prices are rebounding, long-term investors are reducing exposure by selling holdings. As a result, there are concerns that the current rebound—supported largely by short-term chasers—may be insufficient to withstand sustained selling pressure from long-term holders.
Whether Ethereum can reclaim the key technical resistance at $2,150 is expected to be a decisive turning point for future direction. Failure to break above this level convincingly could open the door to a vertical drop toward the bear-flag downside target near $1,000. Key support levels include $1,990, the Fibonacci support at $1,750, and $1,510, which marked the 2025 bottom zone. If the daily close slips below $1,990, a full-fledged down cycle toward $1,000 could begin.
Ethereum is currently maintaining an uneasy rebound without volume confirmation, bringing the worst-case scenario of $1,000 into close view. Experts broadly agree that a market dependent on short-term investor sentiment—without restored confidence from long-term holders—can easily collapse on even minor negative news. Global investors are watching closely to see whether Ethereum can break through the formidable resistance at $2,780 and completely dismantle the prevailing bearish structure.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on it. The content should be interpreted solely for informational purposes.*
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