Ethereum Drops Below $2,550: Is $2,226 the Next Buy Zone for ETH?

ETH-USD Rejection at $2,550 Signals Structural Breakdown

Ethereum’s latest failure to maintain ground above the $2,550 threshold has triggered a decisive structural shift. Multiple candle closes below this high-timeframe resistance confirm that the bullish breakout attempt was a deviation—a classic bull trap. This rejection didn’t occur in isolation. It formed within a confluence zone that included the 0.618 Fibonacci retracement, significant dynamic resistance, and the upper boundary of the recent value area. Losing this structure places bears in control and places downside targets firmly on the table.

As of now, Ethereum is consolidating around $2,490, marking a roughly 3% drop from the rejection zone. The inability to sustain above $2,550 has turned that level into a technical ceiling. While some midweek bullish momentum pushed ETH briefly into the $2,650 range—an area aligned with the yearly VWAP—the rejection was swift, and volume has since dried up as the U.S. market entered a holiday lull.

$2,226 Becomes a Crucial Liquidity Zone for ETH-USD

All eyes are now on the $2,226 support level. This zone is not only a local low but also a structurally significant liquidity pocket. Price action over the past 30 days has repeatedly gravitated toward this area after failed breakouts, marking it as a magnet for buyers. If ETH fails to stabilize above $2,400—a key horizontal line that has seen aggressive buying in three separate 4H attempts—downside pressure could accelerate toward this $2,226 level.

The RSI currently sits at 45.9 on the 4-hour chart, trending downward from previous overbought readings, and MACD momentum is waning. If Ethereum breaches $2,400 decisively, traders should anticipate a quick descent to $2,226. The technical structure confirms this as a potential support-retest before any bullish resumption.

Macro Tailwinds: $10B ETH ETF Inflows Could Change the Game

While short-term price action remains vulnerable, institutional flows are quietly building a bullish foundation beneath the surface. In June alone, Ethereum ETFs recorded $1.17 billion in inflows. July 3rd saw another $149 million, with Fidelity’s FBTC leading at $237 million. Bitwise CIO Matt Hougan recently projected over $10 billion in total inflows during the second half of 2025—figures that would catapult Ethereum into the heart of global tokenized finance infrastructure.

These inflows are not speculative noise. They support the emerging narrative of Ethereum as the base layer for tokenized real-world assets (RWAs). Robinhood’s decision to launch up to 200 tokenized stocks on Ethereum’s Arbitrum L2 only reinforces this narrative. The growing institutional confidence in ETH is fundamental, not hype-based.

ETH Technical Structure Favors Breakout Toward $2,800 If $2,535 Flips

Ethereum is currently trapped between a well-defined $2,400 support and a $2,535 resistance ceiling. Multiple rejections at the $2,535 zone—confirmed with strong wicks and bearish engulfing candles—raise the stakes for bulls. However, a clean reclaim and close above $2,535 could revive momentum and target the $2,600 and $2,732 zones. These levels align with visible imbalances from previous rallies and are reinforced by rolling VWAP clusters.

The longer ETH consolidates under $2,535 without breaking down below $2,400, the more likely a breakout becomes. Technical buyers will want to see a high-volume reclaim of the resistance with RSI back above 55 to confirm momentum. Until then, the structure remains vulnerable to further retracement.

Daily Chart Structure: Bullish Flag Still in Play With Target at $4,300–$4,500

Zooming out, Ethereum’s daily chart offers a completely different narrative. A falling wedge breakout earlier this quarter transitioned into a tight bullish flag structure. The measured move target from this flag pattern projects a surge toward $4,300–$4,500—provided ETH can reclaim and hold above $2,650 in the next few weeks. MACD remains positively aligned, and the RSI has repeatedly bounced off the 50 midline, indicating underlying bullish resilience.

Despite recent selling pressure, the Balance of Power (BoP) indicator is slowly shifting in favor of bulls. These developments hint at a macro-accumulation phase, with high-net-worth wallets and institutions gradually absorbing dips.

ETH/BTC Cross Supports Relative Strength as Bitcoin Stalls

Ethereum’s performance relative to Bitcoin is another underappreciated signal. ETH/BTC has broken out of a descending channel and is showing early signs of a bullish trend. This rotation could reflect market preference shifting back toward smart contract platforms amid growing interest in tokenized finance, staking yield, and real-world asset integration.

This relative strength bolsters the thesis for a near-term ETH recovery once the broader consolidation clears. A rising ETH/BTC ratio has historically preceded altcoin outperformance phases.

ETH-USD Verdict: Cautiously Bullish Above $2,400, But Watch $2,226 Closely

Given the combination of ETF inflows, rising RWAs on Ethereum, and favorable macro-structure on higher timeframes, ETH remains a Buy on deeper pullbacks toward the $2,226–$2,400 range. However, traders should remain defensive if $2,400 fails, as downside acceleration to $2,200 or even sub-$2K becomes possible.

On the flip side, a reclaim of $2,535 and especially $2,650 would trigger bullish continuation toward $2,732, and eventually challenge $2,800. From there, a breakout toward the long-term flag target of $4,300–$4,500 enters play.

If Bitwise’s $10 billion inflow projection proves accurate, the ETH-USD pair may eventually target $10,000—supported by technicals, fundamentals, and rotation flows. Until then, the critical range to monitor remains $2,226 to $2,535. Stay alert to volume shifts and order book behavior around those levels.

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