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Ethereum has surrendered its critical $2,000 support level, dropping to $1,736 in a 31% decline that mirrors familiar bear market patterns from previous cycles. The selloff comes despite significant infrastructure developments, including Visa’s adoption of Ethereum for USDC settlements and new protocol launch services from major exchanges.
Technical Analysis Points to Extended Consolidation
Fractal analysis comparing the current cycle to 2021-2022 suggests Ethereum’s recent plunge represents just the “first minimum” rather than a definitive market bottom. Historical patterns indicate ETH could spend months consolidating between $1,300 and $2,000, with potential tests toward the $1,500-$1,600 zone before establishing a sustained base.
On-chain data from UTXO distribution reveals large supply clusters above current prices, with 2.82% of ETH supply concentrated around $2,822 and 6.15% near $3,119, creating formidable resistance levels. Below spot prices, notable clusters appear at $1,881 (1.58 million ETH) and $1,237, suggesting potential demand zones during further declines.
Derivatives data shows $4-6 billion in long liquidations at risk between current levels and $1,455, indicating bears may target these levels. However, over $12 billion in short liquidations stack up to $3,000, suggesting a potential directional shift once downside liquidity is absorbed.
Infrastructure Progress Contrasts Price Action
While Ethereum’s price struggles, institutional adoption continues advancing. Visa quietly activated Ethereum-based settlement capabilities in December 2025, processing transactions using USDC stablecoin and positioning itself among the first major financial institutions to route real settlement flows through a public blockchain.
Kraken has launched its comprehensive “Kraken 360” service, offering end-to-end protocol launch support including liquidity provision, custody, compliance, and direct access to crypto’s largest global audiences. The platform aims to remove fragmentation in protocol launches by coordinating the full process through a single stack.
Ethereum researchers are also advancing the network’s technical roadmap, working toward a fundamental transformation from re-executing every transaction to verifying zero-knowledge proofs. This “quiet but fundamental” shift could reshape Ethereum’s entire architecture, though implementation details regarding validator requirements remain under development.
Regulatory Headwinds Mount in Key Markets
The broader crypto landscape faces regulatory uncertainty as major exchanges reassess their global footprints. Gemini’s recent exit from the United Kingdom, European Union, and Australia highlights how regulatory complexity is affecting even well-established players. Industry experts describe the move as a significant blow to UK policymakers’ crypto hub ambitions.
UK crypto businesses currently operate under a patchwork of Anti-Money Laundering registration, financial promotions restrictions, and interim guidance while comprehensive regulations remain years away. The combination creates deployment challenges compared to jurisdictions offering clearer frameworks like Singapore, where Gemini is focusing its efforts.
Market Outlook and Key Levels
Structurally, $1,237 emerges as a potential cycle floor based on realized price distribution data, with intermediate support near $1,584 and stronger acceptance around $1,881. The 2021 precedent suggests Ethereum could require 12 months of consolidation around these levels before aleverage resets and spot demand rebuilds.
Current technical patterns indicate extended sideways movement rather than immediate recovery, with the $1,300-$2,000 range likely containing price action in the near term. Despite infrastructure progress and institutional adoption, Ethereum’s price discovery process appears to be following historical consolidation patterns that typically precede major bull market phases. The broader crypto market enters full capitulation mode as institutional voices suggest the bear cycle could extend through Q3 2026.
Sources: Es, Criptofacil, Unlock Bc, Blog, CryptoSlate, CoinTelegraph
