Ethereum Tests Critical Support Zone, Risk of Breakdown and Extended Downtrend?

Ethereum Foundation (EF) has allocated 3,400 ETH to the decentralized finance lending protocol Morpho as part of its treasury optimization strategy.

In a post on X on Wednesday, EF revealed that 1,000 ETH of this amount has been deposited into Morpho Vaults V2. This move follows a previous deployment of 2,400 ETH and $6 million in stablecoins into Morpho Vaults V1 last October.

According to EF, Morpho Vaults V2 meets the criteria outlined in the Treasury Policy “defipunk,” which is designed to select protocols capable of generating sustainable DeFi yields.

The post also emphasized that the protocol uses the GNU General Public License (GPL) 2.0, allowing the source code to be not only open source but also always ready for audits and forks throughout its development lifecycle.

Morpho Vaults V2 also ensures immutability, as the smart contracts cannot be modified by any single entity.

EF stated: “No governance keys. No emergency switch. This is not a limitation but a core principle — true cypherpunk infrastructure does not require trust in the builders, and completely eliminates that need.”

This move comes shortly after EF sold 5,000 ETH via OTC transaction valued at approximately $10.2 million to Ethereum treasury management firm BitMine Immersion (BMNR) last week.

Over the past year, EF has adjusted its treasury management approach in response to criticism that they only leverage the Ethereum mainnet to sell ETH. At that time, many key community members proposed shifting to private trading channels to avoid market misinterpretation of public transactions as negative signals.

Ethereum Price Forecast: ETH Tests $2,110 Support as Bullish Momentum Weakens

Ethereum saw $98.5 million in liquidations over the past 24 hours, with long positions accounting for $66.2 million, according to data from Coinglass.

Currently, ETH is testing a critical support zone around $2,110 — coinciding with the 20-day exponential moving average (EMA) — after losing the 50-day EMA level.

Daily ETH/USDT Chart | Source: TradingView If the $2,110 support is broken, ETH could decline further to $1,740, especially if the short-term bottom around $1,900 fails to hold.

Conversely, to regain upward momentum, ETH needs to break above the near $2,390 resistance zone along with the 100-day EMA, opening the way toward the $2,746 target.

Technical indicators are also signaling weakness, with RSI and Stochastic Oscillator (Stoch) at 51 and 49 respectively, and continuing to decline, indicating that bullish momentum is waning significantly.

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