Ethereum is encountering challenging times in the crypto market, with several chart patterns indicating a potential significant price drop.
Ethereum Market: Current State
Ethereum, the second-largest cryptocurrency, fell to $2,670 this week, over 35% down from its December peak. Over the past 30 days, Ethereum handled $81 billion in volume, significantly lower compared to Bitcoin with $40 billion.
Challenges Facing Ethereum
Ethereum faces competition from new-generation blockchains like Berachain, Solana, and BNB Smart Chain. Additionally, layer-2 platforms like Base and Arbitrum are gaining favour due to lower costs. Ethereum ETFs have also underperformed, and its daily trading volume has decreased to $126 billion.
Price Patterns and Their Implications
The charts show several patterns pointing to a potential decline in Ethereum's price. The first is a 'death cross', marked by the crossing of the 50-day and 200-day Weighted Moving Averages. The second is an ascending wedge pattern, typically leading to price drops. Lastly, the bearish pennant pattern, consisting of a long vertical line, signals a continuation of the decline down to the $2,166 level, possibly even $2,000.
Ethereum is at a potential turning point in the market. The chart patterns and current economic conditions suggest further potential price declines.
