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Ethereum faces a possible drop toward $1,200 if support at $1,990 fails, based on a daily Supertrend setup flagged by Leshka.eth and a bearish flag target. The warning comes as ETH loses March momentum, spot Ether ETFs post about $300 million in outflows, and major wallet groups show weak accumulation. At the same time, Ethereum projects have launched a new framework to reduce fragmentation across layer-2 networks.
Leshka.eth said the current setup mirrors two earlier bullish Supertrend flips that failed in October 2025 and January 2026. In both cases, Ethereum price rose above the indicator’s upper band before losing support and falling 45% and 48%, respectively. Now, with the same structure forming near $1,990, the analyst said a break could open the way to the $1,200 zone.
The Supertrend is a trend-following indicator plotted directly on the chart. It turns green when the market trends higher and red when the market trends lower. In the recent ETH setup, price moved above the upper band and then used it as support.
That same pattern failed twice before. In October 2025 and January 2026, the bullish flips did not hold. After ETH lost Supertrend support, each recovery broke down and led to sharp declines.
Leshka.eth said the same risk now centers on $1,990. If ETH loses that level, the analyst pointed to $1,200 as the next target. The level also matches the measured downside target from Ethereum’s current bear flag pattern.
Meanwhile, Ethereum has already fallen more than 17% from its monthly high reached over two weeks ago. At the same time, the macro backdrop has worsened. Risk appetite has weakened as the US-Israel and Iran war deepened, recession fears grew, and bond traders pushed expected Fed rate cuts out to December 2027.
US spot Ethereum ETFs also recorded roughly $300 million in net outflows during the same stretch. That retreat in fund flows came as ETH’s apparent demand dropped to its lowest level in 16 months. Together, those signals point to softer interest during a fragile market period.
What happens if $1,990 gives way while demand remains weak?
Also Read: ETH Price Outlook 2026: Can Ethereum Reach $2,400–$2,600 by April?
Glassnode data shows Ethereum’s latest rebound has not triggered broad accumulation across major wallet cohorts. Mega-whale wallets holding more than 10,000 ETH have flattened after peaking in late 2025. Their 30-day change has only just moved back toward neutral after months of decline.
The same pattern appears among smaller large holders. Wallets holding 1,000 to 10,000 ETH remain below their late-2025 highs. Their 30-day change sits around flat to slightly negative levels, showing that whales have not returned as strong buyers.
Shark addresses holding 100 to 1,000 ETH also remain well below last year’s peaks. That suggests mid-sized holders have not stepped in with strong conviction either. Taken together, the data points to ongoing distribution across key cohorts.
Still, the broader Ethereum story remains active. Cointelegraph reported that Ether staking continues to rise, while supply on exchanges has fallen to ten-year lows. Those trends stand out as some of the few bullish signs in the current backdrop.
At the same time, Gnosis, Zisk, and the Ethereum Foundation have introduced the ETH Economic Zone at EthCC in Cannes. The effort aims to reduce fragmentation across Ethereum’s many layer-2 networks and make them operate more like one system.
The EEZ would let apps and transactions interact across networks without bridges while still relying on Ethereum’s core security. The launch follows growing debate over Ethereum’s L2-heavy roadmap. Vitalik Buterin recently said the ecosystem may need to rethink parts of that strategy as fragmentation and user experience issues persist.
Ethereum remains under pressure as bearish chart signals, ETF outflows, and weak whale accumulation point to fragile market sentiment. With $1,990 acting as a key support level, traders now watch whether ETH can hold that zone or risk a deeper move toward $1,200.
