Ethereum is currently facing challenges in regaining momentum following a failed breakout attempt earlier this week, which resulted in the price retreating toward $2.2K. With ETH now trading around $2.25K, buyers are defending a short-term support level that could determine whether the market stabilises or continues its correction. Meanwhile, network activity between user wallets has declined significantly from its mid-2026 peaks, providing scant evidence of a resurgence in demand. Ethereum’s daily chart shows the asset breaking below the ascending channel that carried the price higher from the June lows near $1.5K. After reaching a peak near $2.8K in late September, ETH experienced a decline through the midpoint of the channel and ultimately breached its lower boundary in late October. This indicates a clear deterioration in the medium-term structure.
The subsequent rebound retested the $2.5K supply zone, which now overlaps with the broken lower trendline; however, sellers rejected the move. This reaction indicates that this previous support level has now transformed into a resistance level. ETH is currently maintaining the $2.2K support level, which was established as the low in late October. For buyers to reinstate a bullish scenario, they must first reclaim the $2.5K level, which would then bring the $2.8K-$3K supply zone back into consideration. Conversely, a decisive daily close below 2.2K would confirm the channel breakdown and expose the 1.85K demand zone, the consolidation area that preceded the sharp August rally. Below that, the 1.5K region remains the major floor, as it formed the base of the entire recovery that began in June. The 4-hour chart indicates that ETH has been navigating a descending channel since early October, characterised by a sequence of lower highs and lower lows. Earlier this week, the asset briefly exceeded the channel’s upper boundary and rallied toward $2.5K; however, this movement was swiftly countered by a pronounced sell-off that returned it within the structure. This false breakout ensnared late buyers and solidified the negative short-term perspective.
ETH is currently consolidating slightly above the $2.2K demand zone, which has effectively absorbed two sell-offs in recent weeks. If buyers continue to defend it, a relief bounce toward the upper channel boundary around $2.3K could follow. Reclaiming that trendline and then $2.5K would be necessary to invalidate the failed breakout and aim for the $2.7K order block. Conversely, a decline beneath $2.2K would probably drive the price toward the lower boundary of the channel, approximately $2K. Repeated tests of this support heighten the likelihood of failure, and the short-term framework remains advantageous for sellers unless the upper trendline is convincingly breached to the upside.The Transactions Between EOA metric on CryptoQuant monitors the volume of transfers occurring between externally owned accounts, which are wallets governed by private keys as opposed to smart contracts and exchanges. The 30-day exponential moving average acts as an indicator of direct peer-to-peer usage of the network, with increasing values typically signifying heightened user engagement.
The indicator experienced a consistent increase from approximately 400K in 2024 to about 600K by the end of 2025, subsequently escalating to 1.3M in the initial half of 2026. Notably, this expansion occurred while ETH fell toward $1.5K, illustrating that activity and price do not always align in their movements. It also indicated a significant transfer of ownership for ETH during the formation of price lows. Since August, the metric has experienced a significant decline to approximately 560K, nearing its lowest levels of the past year, and is currently in the process of stabilising. This reading warrants careful interpretation, given that transaction counts may be subject to inflation or deflation due to low-value automated transfers and fee conditions, and they do not serve as a direct measure of buying demand. Nevertheless, the significant decline in wallet activity, coupled with the disappearance of the daily channel, indicates that the market is devoid of a robust catalyst. This leaves the 2.2K support level as the key line for buyers to defend.
