Ethereum Faces Potential Drop to $1,200, Analyst Cautions

Ethereum’s native cryptocurrency, Ether (ETH), is showing signs that it may plunge 40% to $1,200 soon, as indicated by a fractal analysis shared by analyst Leshka.eth.

Key Points:

Ethereum is following a pattern witnessed before 45% and 48% declines in the past.
Macro economic uncertainties and the distribution of ETH among large holders negatively affect short-term prospects.

Warning Signs for Ethereum

The $1,200 target for Ethereum stems from a Supertrend setup on its daily chart, where prior bullish reversals failed and resulted in steep declines.

The Supertrend is a straightforward trend-following indicator integrated into the price chart, changing color based on market momentum: green indicates a rising trend, while red signifies a falling trend.

Similar bullish indicators were seen in October 2025 and January 2026, but neither maintained its momentum.

Price Analysis ETH/USD daily price chart. Source: TradingView

In both instances, the price surged above the Supertrend’s upper band, which subsequently acted as support. Once ETH fell below this support line, it plummeted by 45% and 48%, respectively.

Leshka.eth noted:

“Now the same setup is forming at $1,990.” Translation: Now the same structure is emerging at a price of $1,990.

This prediction aligns with Ethereum’s current bear flag pattern.

Price Analysis ETH/USD daily price chart. Source: TradingView

These bearish setups are occurring as Ethereum loses its gains from March amid worsening economic conditions.

Additional macro influences include rising recession fears due to increasing tensions between the US and Israel with Iran, alongside market sentiments affecting rate-cut expectations.

Target rate probabilities Target rate probabilities for the December Fed meeting. Source: CME

ETH has dropped over 17% from its peak monthly value of two weeks prior, with approximately $300 million in net outflows from US spot Ether ETFs during the same timeframe.

The demand for Ethereum has reached its lowest level in 16 months.

Weak Holder Accumulation

Recent rebounds in Ethereum prices have not led to a significant increase in accumulation among major wallet holders, according to data from Glassnode. For instance, the number of mega-whale wallets containing over 10,000 ETH has plateaued since peaking in late 2025, with recent changes returning towards neutral after a prolonged decline.

Ethereum mega-whale address count balance Ethereum mega-whale address count balance (>10K ETH). Source: Glassnode

This decline in aggressive accumulation is also reflected among smaller wallet holders.

Additionally, sharks holding between 100 to 1,000 ETH are also trending below last year’s peaks, indicating a lack of robust buying activity among smaller large holders.

In summary, these trends illustrate ongoing distribution and a lack of commitment among significant ETH holders, emphasizing the potential for a deeper price drop should $1,990 be breached.