Ethereum Price Forecast: ETH Bull Trap Risks 40% Decline Next

Ethereum’s native token, Ether (ETH), has surged more than 25% since carving out a local low near $1,740 a month ago, including an 8% jump in the past 24 hours even as the US–Iran war escalates.

After a brutal, nearly 60% slide in recent months, the bounce is reviving calls that ETH has finally found a bottom. But its chart is flashing bull trap risks.

ETH Bear Flag Could Crash Price By Another 35%–40%

As of March 5, ETH was retreating from the upper trendline of its prevailing ascending channel pattern, which appears like a bear flag.

A bear flag forms when the price rises inside a rising, parallel channel after a strong downtrend. It typically resolves when the price breaks below the lower trendline and falls by as much as the previous downtrend’s height.

Applying this technical rule on ETH’s daily chart increases the odds of a bull trap scenario.

In other words, the price risks an initial dip toward the flag’s lower trendline near $1,900. And if the decline continues below the trendline, with a rise in trading volumes, the ETH price can fall to its bear flag target at around $1,300.

That amounts to around 40% correction in the coming weeks.

ETH Liquidation Clusters Back Bull Trap Fears

Ethereum’s futures market is reinforcing the “bull trap” risk.

On Binance, the ETH/USDT liquidation heatmap shows the biggest liquidity pocket sitting near $1,911, a level that could trigger roughly $695 million in long liquidations if the price slides into it.

Leveraged traders borrow to bet on ETH going up. If ETH drops far enough, exchanges automatically close those positions (“liquidate” them) to prevent further losses.

These liquidation zones often act like price magnets because once ETH starts moving toward them, forced sell-offs can snowball and push the price lower faster, even if spot demand hasn’t changed much.

Wall Street Still Isn’t Convinced Of The ETH Rally

Even the “smart money” flow picture looks conflicted.

Spot Ether ETFs logged net outflows on March 4 despite ETH’s sharp bounce, signaling that some traditional investors may be selling into strength instead of chasing the rally.

In simple terms, when ETFs see inflows, it usually reflects fresh institutional demand; when they see outflows, it means capital is leaving those vehicles.

That divergence doesn’t automatically invalidate ETH’s rebound, but it does fit the bull-trap setup.

If the price is rising while ETF money is heading for the exits, the move can end up being driven more by short covering and leverage than durable, long-only accumulation, making ETH more vulnerable if momentum cools or headlines worsen.