Ethereum (ETH) is exhibiting a chart pattern that bears resemblance to formations observed in earlier market cycles. While traders are drawing comparisons to the structure seen during the 2021–2022 period, which ultimately concluded with a sharp decline, the current setup hints at a potentially different outcome.
Historical ETH Price Movement: 2021–2022 Cycle
During 2021 and the early part of 2022, Ethereum's price action formed a prominent head-and-shoulders pattern. This formation consisted of a left shoulder appearing in mid-2021, followed by a peak that constituted the head later that year, and a right shoulder developing in early 2022. The crucial neckline support for this pattern was ultimately breached in mid-2022, leading to a significant downturn. Following this breakdown, ETH experienced a decline of over 65% within a period of less than two months.
2021-2022 Cycle
➺ $ETH formed head and shoulder pattern
➺ Lost the uptrend and dumped 65% in 2 months2025-2026 Cycle
➺ ETH has formed inverse head and shoulder pattern
The breakout and pump will be insane.
This substantial drop effectively marked the end of the preceding uptrend. The pattern at the time closely mirrored the textbook definition of a bearish reversal structure, and many traders continue to reference this formation when analyzing current market conditions.
Emerging Inverse Head-and-Shoulders Pattern
In contrast to the past, a new pattern is currently taking shape on the ETH chart. This time, the formation is an inverse head-and-shoulders pattern, typically considered a bullish indicator. The left shoulder of this pattern emerged around mid-2024. A subsequent lower low in late 2024 formed the head, and the right shoulder is now in the process of developing in early 2025.
The projected neckline for this inverse head-and-shoulders pattern is situated between the $4,000 and $4,400 levels. This resistance zone remains a considerable distance from ETH's current trading price.
Current Price Action and Market Dynamics
As of the latest reporting, ETH is trading at $3,100. The cryptocurrency experienced a decline of more than 3% in the last 24 hours and a 1% drop over the past seven days. On Sunday, ETH briefly moved above the $3,300 mark before experiencing a subsequent pullback. Since the weekend, ETH has depreciated by approximately 5%. This recent price movement aligns with broader market pressures, which have been partly attributed to renewed global trade concerns.
Market analyst CW commented on the current situation, suggesting, "First, the CME gap near 3k will be filled, and then the next target will be 3.2k." This perspective indicates a potential for a short-term dip before any subsequent recovery.
In parallel, the amount of ETH being locked up for staking has reached an all-time high, with continued inflows being observed. Concurrently, major market participants are closely monitoring ETH's performance. According to analyst Maartunn, while Bitmine allocated $14.6 billion to ETH in 2025, significant new movements have not been observed in 2026 thus far.
Bitmine poured $14.6B into ETH last year, but it’s been quiet since the new year began.
No major moves (other than stacking) so far in 2026.
Furthermore, _OnChain, an analyst at CryptoQuant, noted, "I see not only price action segmented into parts, but also time itself."
A related report details how institutional holdings and interest in Ethereum ETFs have correlated with significant moments in ETH's price history. This analysis incorporates fund-related metrics and recent reactions to regulatory developments, such as the Clarity Act.