Ethereum has seen a sharp price decline in February 2024, continuing the negative trend observed at the start of the year.
Overall Crypto Market Condition
Amidst the overall downturn in the cryptocurrency market, Ethereum fell to $2,075, losing 50% of its value compared to peak levels in November 2023. This marks the first sharp February decline since 2018, revealing a deterioration in seasonal indicators compared to competitors like Bitcoin and Ripple, which also showed negative dynamics.
Reasons for Ethereum's Decline
Ethereum's decline is partly due to outflows in exchange-traded funds. For six days, there was a leakage of assets, resulting in a total value drop to $2.86 billion. The fall was exacerbated by competition from other projects like Solana and BNB Smart Chain, as well as Base and Arbitrum, which are reducing Ethereum's market share. The Fear & Greed Index, which has dropped to 33, also influences the downturn.
Technical Analysis: Bearish Signals
Technical analysis shows that Ethereum has formed a bearish signal known as a 'death cross,' where the 200-day moving average crosses below the 50-day one. The loss of the key support level at $2,150 has intensified the downtrend. This price acted as the neckline of the triple top pattern at $4,000. The Average Directional Index has reached 40, indicating strengthening downward momentum.
Ethereum prices continue to decline amid strengthening bearish technical signals, which could lead to further price drops.
