Ethereum (ETH), the second-largest cryptocurrency, is facing renewed bearish pressure in early 2026, prompting concerns among investors about a potential drop below the $2,000 mark. Several factors contribute to this pessimistic outlook, including geopolitical tensions and significant movements of ETH by large holders.
As of January 22, 2026, Ethereum is trading around $3,009, showing a 1.43% increase in the last 24 hours. However, this slight upward movement may not be enough to dispel the overall bearish sentiment. After failing to surpass the $3,300 resistance level, the market sentiment has shifted, with traders actively hedging against a possible capitulation event that could drive prices down to $2,500.
Geopolitical uncertainty, particularly escalating trade tensions indicated by the "Greenland Tariff" ultimatum, has created a risk-off environment, impacting global markets and the cryptocurrency sector. The Nasdaq Crypto Index experienced a decline of over 2.3%, with Bitcoin (BTC) retreating to the $88,000–$90,000 range, further dragging down the altcoin market. Ethereum, known for its high beta, has reacted more sharply, with a roughly 3.6% decrease in the last 24 hours.
Technical analysis reveals warning signals that indicate weakening bullish control. Ethereum recently broke out of a symmetrical triangle pattern to the downside. A break below the $2,880 support level could trigger a cascade toward $2,500, while failure to reclaim $3,150 on high volume would invalidate any immediate bullish outlook. A 4-hour candle close below $2,980 could accelerate selling pressure.
On-chain data shows increased activity from whales, with over 110,000 ETH moved in the past 24 hours, suggesting potential sell-side pressure. This substantial movement could exacerbate the downward pressure on Ethereum's price.
Despite the bearish signals, some contrarian traders are setting buy orders between $2,450 and $2,550, viewing a potential crash as a long-term accumulation opportunity in anticipation of a recovery by mid-2026.
However, moving averages for Ethereum indicate a "Strong Sell" outlook, considering MAs ranging from 5-day to 200-day periods. The 14-day Relative Strength Index (RSI) stands at 52.883, suggesting a neutral position.
While some analysts predicted a strong year for Ethereum in 2026, citing its strong on-chain fundamentals, increasing network usage, and institutional participation, the current market conditions suggest otherwise. Standard Chartered, while still optimistic about Ethereum's long-term potential, has lowered its ETH price target for the end of 2026 to $7,500, down from a previous estimate of $12,000.
The cryptocurrency market, excluding Bitcoin, Ethereum, and stablecoins, has been in a bear market since December 2024, declining approximately 44% through the end of 2025. Ethereum itself experienced an 11% decline, with other tokens like Solana falling even more sharply.
In conclusion, Ethereum faces significant headwinds in early 2026, with bearish sentiment fueled by geopolitical tensions, whale activity, and technical indicators. While a drop below $2,000 is not certain, the possibility remains a concern for investors.
