Ethereum’s native token, Ether (ETH-USD), has extended its sharp downturn into December, adding to a roughly 30% decline over the past three months. Worries are mounting among investors about how much further the sell-off could run by year’s end, with critical on-chain metrics showing weakness.
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Ether is now facing a major risk of a deeper sell-off toward the $2,500–$2,200 price range. This dramatic downside is being signaled by a breakdown in key on-chain support and the formation of a bearish technical pattern that threatens to break lower.
MVRV Metric Puts $2,500 Ethereum Price in Focus
The on-chain valuation metric known as Market Value to Realized Value (MVRV) shows critical support weakening. Ether is currently retesting its −0.5σ MVRV deviation band, which sits near $2,820–$2,830, as support for the second time in a week.
This MVRV band has historically acted as an important mid-cycle support level during previous downtrends. If Ether suffers a sustained breakdown below this −0.5σ support, attention will immediately shift toward the next major downside target: the realized price band near $2,500. This level has historically functioned as a downside magnet during corrective market phases.
Bearish Pennant Hints At 20% Ethereum Correction
Adding to the on-chain warnings, Ether’s recent price action has compressed into a bearish pennant on the daily chart. This is a triangle-shaped continuation pattern that typically forms after a sharp decline and usually resolves by continuing the prior bearish trend.
A confirmed breakdown of this pennant pattern would open the door to a measured move toward the $2,200–$2,220 area, representing a correction of roughly 20% below current levels. This downside zone also aligns with a previous demand cluster and the 0.786 Fibonacci retracement of the 2025 rally.
Ethereum Bulls Cling to $3,550 Breakout Hope
Despite the strong downside signals, a potential breakout pattern is keeping the hopes of bulls alive. Ether is currently forming a falling wedge pattern, which is a reversal pattern that typically results in a breakout to the upside.
A successful rally that breaks above the wedge’s upper trendline could send the price toward the $3,550 target going into the new year. This upside projection aligns with bullish price predictions made by multiple analysts, with some valuation models deeming the cryptocurrency “undervalued” and projecting prices above $4,000.
At the time of writing, Ethereum is sitting at $3,008.59.
