Key Points
Ethereum Price Drops, Invalidating Bullish Pattern
On Monday, the price of Ethereum (ETH) crashed to a key support level. This increases the risk of further downside after invalidating an important bullish chart pattern. Ethereum (ETH) fell to a low of $2,146, its lowest level since August of the previous year. This represents a decline of approximately 40% from its December high.
The weekly chart reveals that Ethereum has formed two distinct patterns in recent months. Initially, it developed a triple-top formation around the $4,000 level. It has been struggling to break above this point since March of the previous year. A triple-top is a recognized bearish signal, often leading to additional losses once the price falls below the neckline. In the case of Ethereum, the neckline was at $2,146, which was its lowest level in August of the previous year.
Ethereum also formed an inverse head and shoulders pattern, a well-known bullish indicator. This pattern includes a neckline, two shoulders, and a head. In this case, the neckline was at $4,000, the right shoulder was at $2,830, and the head was at $2,145. However, Ethereum has invalidated this inverse head and shoulders pattern by moving below the left shoulder.
With the triple-top pattern now active, Ethereum could face additional declines. It could potentially drop to the next key support at $1,520, its lowest point in October 2023. A strong bullish breakout would only be confirmed if Ethereum rallies above the triple-top resistance at $4,000.
Ethereum Network Faces Significant Challenges
The price struggles of Ethereum come as the network faces significant challenges. Data from TokenTerminal shows that Ethereum is no longer the most profitable blockchain network. So far this year, Ethereum has generated $155 million in fees, falling behind Circle, which has earned $169 million. Meanwhile, Solana, Tron, Jito, and Tether have posted $261 million, $294 million, $303 million, and $414 million in fees, respectively.
Ethereum has also lost its long-held dominance in the decentralized exchange sector. Over the past seven days, decentralized exchanges built on Ethereum processed nearly $20 billion in transactions. This is lower than BNB Chain’s $25.7 billion and Solana’s $42 billion. Tron (TRX) has also surpassed Ethereum in stablecoin transaction volume, primarily due to its lower transaction fees.
Additionally, spot Ethereum exchange-traded funds have seen a lukewarm reception on Wall Street. They have attracted just $2.76 billion in inflows since September of the previous year. In contrast, Bitcoin funds have secured over $40 billion.