Ethereum price remains under pressure, with three alarming chart patterns indicating a potential 20% decline in the near future.
Ethereum (ETH), currently the second-largest cryptocurrency, dropped to $2,670 on Monday, reflecting a significant decrease of over 35% from its peak in December.
This downturn can be attributed to increasing competition within the blockchain space, particularly from notable layer-1 networks such as Berachain (BERA), Solana (SOL), and BNB Smart Chain (BNB).
Additionally, Ethereum is losing ground to layer-2 solutions like Base and Arbitrum, which are gaining traction due to their more affordable transaction costs. In the last 30 days, decentralized exchanges (DEX) on Ethereum recorded a trading volume of $81 billion, while Base and Arbitrum processed $35 billion and $28 billion, respectively.
Data indicates that Ethereum exchange-traded funds (ETFs) are failing to generate anticipated inflows, experiencing outflows over the last two market days, resulting in a total of $3.15 billion. In contrast, Bitcoin ETFs have seen nearly $40 billion in inflows.
Ethereum’s daily trading volume has also declined, now at $126 billion, a steep drop from the December high of $330 billion. Revenue has plummeted to $5 million on Sunday, down from over $58 million in November of the previous year.
Moreover, interest in Ethereum futures has significantly dropped, with open interest falling from this month’s peak of $35 billion to the current $23.3 billion.
Bearish Chart Patterns Signal Further Decline for Ethereum
The daily chart reveals that Ethereum may face additional downside risk. A death cross occurred on February 9, highlighted by the intersection of the 50-day and 200-day Weighted Moving Averages.
Furthermore, Ethereum has created a rising wedge pattern, characterized by two ascending trendlines, along with a bearish pennant pattern, consisting of a long vertical line and a converging triangle.
Typically, these patterns indicate further downside potential, with a critical support level emerging at $2,166, the lowest point this month. A breach of this level could lead to a subsequent drop towards $2,000.
