Ethereum, one of the leading cryptocurrencies, is experiencing significant price declines. Its value has dropped by 52% in recent months, with technical and on-chain metrics signaling potential further losses.
Current State of Ethereum
Ethereum peaked at $4,105 in December, but as of March 20, its price fell to $1,970. This 52% decline makes it one of the worst-performing blue-chip coins. Analysts from Standard Chartered recently lowered their Ethereum forecast from $10,000 to $4,000, citing increased competition from layer-1 and layer-2 networks.
Competition and Challenges for Ethereum
Layer-2 networks on Ethereum, such as Coinbase’s Base, Arbitrum, and Optimism, are attracting more users due to lower fees. While DEX protocols on Ethereum’s mainnet handled over $9.8 billion in volume over the past week, competitors like Arbitrum and Base obtained $2.87 billion and $2.8 billion respectively. Ethereum also faces competition from Solana and BNB Chain. BNB Smart Chain’s DEX protocols handled over $13 billion in the last seven days. Ethereum might not benefit significantly from emerging technologies like Real World Asset tokenization due to its higher fees and slower speed.
Ethereum Price Technical Analysis
The chart indicates a strong downward trend over the past months, beginning after a triple-top pattern at $4,000. The death cross, formed by the crossing of the 50-day and 200-day moving averages, suggests further downside momentum. Oscillators like the RSI and Percentage Price Oscillator have decreased. The coin is likely to continue declining, with sellers targeting the $1,500 psychological point, about 25% below the current level.
Amid Ethereum’s price fall and increased competition from other blockchains, current metrics suggest ongoing downward momentum. Investors should closely monitor technical indicators and new technologies to adjust to market changes.
