• Ethereum (ETH) has been underperforming in the crypto market in the past month, despite rallying to $4,091 prior to the Dencun upgrade.

• Market and technical indicators suggest that ETH might face a deeper correction before a sustained recovery.

In the previous month, Ethereum (ETH) did not perform as well as Bitcoin and other cryptocurrencies, even though it reached $4,091 before the Dencun upgrade.

Traders are now questioning whether the downtrend of the altcoin is truly over.

During the same period, Bitcoin's (BTC) price dropped by 18%, and the total cryptocurrency market capitalization decreased by 16%.

Multiple market and technical indicators indicate that ETH could undergo a more profound correction before starting a lasting recovery.

Despite experiencing an 8% increase in March, Ethereum did not perform as impressively as Bitcoin and other top layer 1 tokens.

BTC's price surged by 21% in the last 30 days, while other top-cap layer 1 tokens like BNB and SOL rallied 44% and 76% respectively.

In March, the ETH/BTC ratio went down to its lowest point since January.

Several factors contribute to ETH's underperformance in March, including Bitcoin-specific elements in 2024.

For instance, the approval of U.S. spot Bitcoin ETFs by the Securities and Exchange Commission on Jan. 11 has been quite successful.

Additionally, the upcoming Bitcoin supply halving, which historically precedes a parabolic surge in crypto prices, has further boosted BTC's momentum.

Ethereum's network activity has decreased over the past week, as indicated by Glassnode data.

Even though Ethereum remains the top player in the layer 1 sector, Solana has managed to capture some of its market share in terms of on-chain activity and stablecoin transfer volume.

The recent attempt by Ethereum to recover was hindered by supply congestion around the $3,600 level, highlighting this area as a major obstacle in ETH's path to recovery.

Data from IntoTheBlock emphasizes the significance of this resistance zone, indicating that a high level of selling activity could lead to a further drop in Ether's price.

Following a peak of $4,093 on March 12, ETH price declined due to profit-taking by bears and a correction in the broader crypto market.

A bear flag pattern can be observed on the daily chart, suggesting a continuation of the downtrend, despite the price rebounding to the current level of $3,511.

Ethereum bulls are hopeful for support from the lower boundary of the flag at $3,497.

A daily close below this level would signal a bearish breakout from the chart formation, potentially leading to a decline to $3,060, representing a 26% decrease from the current price.

The relative strength index's position around 50 indicates that bears were selling during the recent rally to $3,600.