Ethereum's 27% Monthly Drop Triggers On-Chain Warning of 28% Further Decline
A technical breakdown and a key on-chain metric are converging on a sobering price target, suggesting Ethereum's correction may have further to run.
Ethereum price has dropped more than 6% in the past 24 hours and is now down about 27% over the last 30 days. This significant monthly decline has triggered a confluence of bearish technical and on-chain signals, opening the door to a potentially deeper correction. A decisive breakdown from a major chart pattern has aligned with a warning from a long-term holder profitability metric, collectively pointing toward a possible downside target near $2,140. This level represents an approximate 28% further decline from recent prices and aligns with a critical zone that marked the cycle low in June. As Ethereum trades below its strongest on-chain cost-basis support wall, the analysis suggests the $2,260–$2,140 region is emerging as the most probable area for the formation of a new cycle bottom should current market conditions persist.
Technical Breakdown: The Bear Flag and Its Measured Target
The recent price action has been dominated by the breakdown of a clear bearish continuation pattern known as a bear flag. This pattern formed after Ethereum failed to sustain momentum above the $2,990 resistance level. The structure began with a sharp downward move—termed the "pole"—which constituted a drop of 28.39%. This was followed by a period of consolidation within a rising channel, which formed the "flag." The breakdown from this flag structure is a classic technical signal that the prior downtrend is resuming.
The activation of this pattern provides a measured move target. Based on the length of the initial pole, the projected decline from the breakdown point points toward a price target around $2,140. This represents a drop of almost exactly 28% from the level at which ETH broke beneath the flag's support. This technical projection establishes a clear objective for sellers and gives traders a quantifiable risk parameter against which to evaluate market structure.
On-Chain Confirmation: Long-Term Holder NUPL Points Lower
To assess the validity of this technical target, analysts often turn to on-chain data for confirmation. One particularly relevant metric in the current environment is the Net Unrealized Profit/Loss (NUPL) for long-term holders. NUPL measures the aggregate unrealized profit or loss sitting in the wallets of investors who have held their coins for more than 155 days. It effectively gauges the conviction and profit-taking incentive of Ethereum's most steadfast investors.
Since August 22, the long-term holder NUPL has been on a consistent downtrend. This indicates that these key market participants are gradually seeing their unrealized profits diminish, which can soften their conviction and increase the propensity to sell to realize remaining gains or minimize losses. The metric recorded a short-term low of 0.36 on November 21. However, the more significant cycle low sits at 0.28, which was recorded on June 22—a difference of roughly 22%.
Historically, when NUPL hit this 0.28 level in June, Ethereum found a major bottom at approximately $2,230 and subsequently initiated a powerful rally to $4,820, a gain of 116%. If market conditions were to deteriorate enough for long-term holder NUPL to retest that same cycle-low band of 0.28, it would imply a price drawdown in the range of 20–25% from ETH's recent local high near $2,990. This range aligns precisely with the 28% bear-flag target at $2,140. The convergence of an independent on-chain metric with a pure price pattern projection strengthens the case for this zone as a critical area for potential trend change.
Eroding Support: The Cost-Basis Distribution Heatmap
Beyond patterns and holder metrics, the actual on-chain cost basis of existing supply provides a map of potential support and resistance. The Cost Basis Distribution Heatmap visualizes where large clusters of ETH were acquired by investors. These dense concentration zones often act as strong support during pullbacks, as holders who bought at those levels are less likely to sell at a loss.
Currently, the heaviest concentration of Ethereum supply sits within the narrow band between $2,801 and $2,823, where approximately 3,591,002 ETH were accumulated. This represents Ethereum's strongest immediate on-chain support wall. However, price has already broken below the $2,840 level, applying significant pressure to this critical zone. The inability of ETH to quickly reclaim $2,840 and subsequently close above the $2,990 resistance would indicate that sellers remain in firm control of the market momentum.
Should this weakness continue, the analysis points to a sequence of lower support levels based on trend extensions. The first notable level is $2,690, situated about 4.5% below recent prices. A breach there could see an extension toward $2,560 (a further 4.6% drop), followed by $2,440 (another 4.8%). The $2,260 level is particularly significant as it rests just 2% above the $2,230 price associated with the June NUPL bottom.
Beneath all these levels lies the full bear-flag target at $2,140. A move through $2,266 would make this target the most realistic scenario for completing the current corrective wave.
The Path to Invalidation: What Would Negate the Bearish Outlook?
While the evidence points toward further downside risk, no market analysis is complete without defining conditions that would invalidate the primary thesis. For the current bearish structure to be negated, Ethereum would need to demonstrate considerable buying strength across multiple layers.
The first step would be a recovery and sustained hold above the $2,840 level, reconquering the strong cost-basis support wall. Following that, ETH would need to break decisively above the recent failure point at $2,990. A close above $3,090 would significantly damage the bearish continuation narrative. Ultimately, only a push through and hold above $3,240—a move of roughly 15% from recent levels—would completely nullify the bear flag pattern and suggest that the corrective phase has conclusively ended.
Strategic Conclusion: Navigating Toward a Potential Bottom Zone
The current landscape for Ethereum presents a cohesive narrative built from multiple data sources: price action, holder behavior, and supply distribution. The breakdown from the bear flag provides a clear technical roadmap lower. The downtrend in long-term holder NUPL suggests foundational investor conviction is waning, with room to approach cycle-low levels seen at previous significant bottoms. Meanwhile, Ethereum trades beneath its densest on-chain cost-basis support, testing investor resolve.
The convergence of these factors brings high-probability focus to the $2,260–$2,140 region. This zone represents not only the measured target of the current bearish pattern but also aligns with the price area associated with extreme unrealized loss for long-term holders in June—a condition that preceded a major bullish reversal.
For market participants, this analysis underscores the importance of key levels. Watch for whether ETH can reclaim $2,840 to challenge the immediate bearish control. Monitor long-term holder NUPL for signs of stabilization or further decline toward its historic low band. Should selling pressure persist and drive price toward the identified lower zone, it will be critical to observe on-chain behavior and volume patterns for signals of accumulation or capitulation that have historically marked cycle bottoms.
The broader implication is that Ethereum may be undergoing a necessary and deep correction within its larger market cycle. While periods of significant decline test investor sentiment, they also establish new foundations from which sustainable advances can be built. The coming weeks will be crucial in determining whether these converging signals accurately forecast a final washout before a renewed phase of accumulation.
Disclaimer: In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.