Ethereum Dip Warning: On-chain data and technical signals point to more downside ahead

TLDR

The Ethereum exchange supply ratio has dropped to record lows, but the price has yet to match the bottom.

Historical patterns show that differences between volume and price tend to resolve with lower price movements.

ETH broke below the 1-day bull market support band, a level that has recently served as a strong reversal zone.

Analysts are closely watching the $2,150 support zone to increase positions ahead of any recovery.

A new surge may be coming for Ethereum as on-chain data and technical signals begin to converge in secret. The exchange's supply-to-supply ratio has fallen sharply to an all-time low, yet the price of ETH hasn't followed suit.

This difference has raised concerns among analysts who track the asset. Historically, such gaps between gauge and price tend to close in a downward correction rather than a rally in the ratio.

A new dip may occur as the information on the chain differs from the price.

Based on what the exchange supply ratio is currently showing, a new dip could be coming for Ethereum. This metric tracks how much ETH is held on trading platforms at any given time.

Historically, when the ratio falls sharply, selling pressure eases and inflation builds.

The problem is that the current ratio has fallen, but the price has not created a corresponding bottom. CryptoQuant analyst Pelinaipa pointed to this discrepancy, noting that the market may not yet fully value the token. That difference between metric and price is what makes the current setup especially worth watching.

Such differences do not last long before one side leaves. Based on historical patterns, it is typically the price that falls to close the gap rather than the ratio recovering upwards. That design alone puts the downside risk firmly on the table.

One reason the price may still be holding up is activity in the primary market. Used positions can be artificially maintained for a period of time, but this type of support is temporary. Once released, the price usually moves quickly to reflect the underlying conditions.

Technical failure adds more weight to the lower part

Aside from the on-chain divergence, Ethereum's chart structure is also showing signs of stress. ETH has broken below the 1-day bull market support band, a level that has served as a strong reversal zone over the past several months. That break alone is worth keeping a close eye on.

Analyst CrypticTrades_ has weighed in on the price action, noting that while this may still be a short-term divergence, a confirmed breakout will shift focus to lower levels. The next key area is located around $2,150, which may act as a support for the previous resistance zone on higher timeframes.

That zone is where some analysts plan to add to their positions. Keeping it clean there can lay the foundation for a more sustainable move forward. However, the recovery theory only holds until the price has completely lost that level.

Currently, both signs are pointing in the same direction. Until ETH regains the bull market support band and the on-chain divergence is resolved, the possibility of a new dip is technically on the table.