Ethereum (ETH) Tests Critical Support: Long-Term Rally Could Hit $10K–$20K

Ethereum (ETH) fell below $2,000 on Friday, February 6, extending its sell-off after breaking the critical $3,700–$3,600 support zone earlier this month. 

According to crypto analyst Crypto Patel, the breakdown confirmed a broader bearish structure, signaling a shift from distribution into a corrective phase. Since then, ETH has dropped more than 50% and is now testing long-term Fibonacci support near $1,700.

As the sell-off continued, major accumulation levels were triggered, providing potential buy levels. The first significant demand zone at $2,000 to $1,800 has already triggered early bids, while attention is now given to the deeper zone at $1,400 to $1,270, corresponding to the 0.786 Fibonacci retracement level. 

Moving away from the short-term weakness, these zones are where potential buyers could temporarily stabilize the market.

Also Read: Ethereum Transfer Spike Hits 1.17 Million, ETH Price Faces $1,770 Risk

Institutional Buying Supports Ethereum’s Long-Term Outlook

Despite the current decline, institutional support continues to underpin Ethereum’s long-term view. In fact, U.S.-based Ethereum exchange-traded funds (ETFs) hold about 6 million ETH, and Bitmine holds about 4.28 million ETH. 

Combined, these institutions hold nearly 13 million ETH, taking away from circulating supply. This situation sets the stage for long-term accumulation, even as ETH declines.

Source: Crypto Patel X Post

From a macro point of view, Crypto Patel is still positive, as the levels look similar to corrections rather than the end of the cycle. In previous cycles, there were corrections of 65%-80% before the big rallies. 

Currently, ETH is testing the 0.618 Fibonacci level around $1,700, and there is further support around $1,270. Long-term levels of $10,000 to $20,000 are key levels for institutions, indicating potential buying opportunities.

Whale Transfers Highlight Market Pressure

After this corrective phase, Trend Research transferred 20,000 ETH, valued at around $38.6 million, to the Binance exchange on Friday as a part of active balance sheet management in a stressed market. 

According to Lookonchain, the transfer was for repaying loans and liquidity purposes. Moving from institutional buying to actual market activity, the whale movement could cause short-term ripple effects on the Ethereum lending platforms due to leveraged positions.

Source: Lookonchain X Post

Trend Research still holds 416,149 ETH (~$791.5 million) supplied on Aave and owes around $343.77 million. The liquidation risk ranges from $1,509 to $1,800. 

This shows how liquidation risks are still present due to a fall in the ETH price. This is also a reflection of how the activities of whales are interconnected with other activities.

Also Read: Ethereum’s Vitalik Buterin Urges End to Copy-Paste EVM Chains