Key Points
Ethereum’s price has been on a downward trend for three days in a row. This has resulted in the formation of a death cross pattern, raising the risk of the price plummeting to $1,500.
On Wednesday, Ethereum (ETH) fell to $2,430. This is a drop of over 40% from its peak in November. The cryptocurrency has been underperforming compared to Bitcoin (BTC) and other major altcoins. This is due to a slowdown in exchange-traded fund inflows and ongoing issues within its ecosystem.
Information from TokenTerminal shows a consistent decline in the fees generated by Ethereum in recent months. Last week, the network generated $9.8 million, a significant drop from last year’s weekly high of over $217 million. Other networks like Tron (TRX), Jito (JTO), Solana (SOL), and Uniswap (UNI) have outperformed Ethereum in fee generation this year.
Ethereum’s Position in Decentralized Finance
Ethereum’s standing in decentralized finance has also taken a hit. The total value locked has dropped by 12.5% in the last 30 days, now standing at $54.32 billion. Despite this, it remains the biggest player in the sector, with stablecoin market capitalization rising to $121 billion.
Ethereum has also been losing market share to its layer-2 networks. These include base, arbitrum, and optimism, which are now handling substantial transaction volumes. For instance, Coinbase’s Base has overseen more than $7.4 billion in cryptocurrency volume in the past week. Meanwhile, arbitrum recorded $5.7 billion. Previously, these volumes would have been processed on Ethereum.
The daily chart indicates that Ethereum has been forming a series of lower lows and lower highs in recent weeks. The price has dropped from $4,000 in November to $2,400, resulting in a death cross pattern as the 200-day and 50-day moving averages intersect.
Furthermore, Ethereum has fallen below the 61.8% Fibonacci retracement level. This is where most pullbacks typically occur. It has also moved below the oversold level of the Murrey Math Lines indicator.
This suggests that Ethereum could potentially drop around 35% to $1,530. This would be its lowest price since October 2023. The likelihood of this drastic price drop would increase if Ethereum falls below the current support level at $2,130, the lowest point reached in August.