Ethereum’s price remains entrenched in a severe bear market, having dropped over 53% from its peak in November.
Ethereum (ETH) has fallen below the critical support level of $2,000 and is lingering close to its lowest mark since November 6.
This ongoing decline has coincided with a dwindling demand for the coin on Wall Street. Over the past three weeks, all spot Ethereum ETFs have experienced outflows, bringing the cumulative net inflow down to $2.52 billion. Total assets have reduced to approximately $6.72 billion.
The downturn in Ethereum’s value has been exacerbated by increasing anxiety within the cryptocurrency market. The widely referenced crypto fear and greed index has slipped into the fear zone, registering a score of 21. Typically, Bitcoin (BTC) and other alternative coins tend to falter when investor confidence is low.
Recent ETH token sales by the Ethereum Foundation have not alleviated the situation. Last week, Harikrishnan Mulackal, a former engineer at the foundation, cautioned that Ethereum’s future could be precarious without strong leadership.
The Ethereum network is also encountering significant competition from other layer-1 blockchains like Solana (SOL) and BSC Chain. As reported by DeFi Llama, DEX protocols on Ethereum processed $1.012 billion in token volume on Monday, which is noticeably lower than BSC’s $1.63 billion and Solana’s $1.077 billion.
Ethereum price has developed another precarious pattern
The current downturn in ETH’s price follows the formation of a triple-top pattern on the weekly chart, which comprises three peaks and a neckline at $2,126.
Additionally, a death cross was observed on the daily chart when the 50-day moving average crossed below the 200-day moving average on February 13. This death cross is often regarded as one of the most hazardous patterns in technical analysis.
At present, ETH is gradually establishing another bearish pattern — a pennant. This formation features a long vertical line followed by a symmetrical triangle, which is approaching its confluence point, indicating that a bearish breakdown could occur soon.
Consequently, a drop below the year-to-date low of $1,757 could herald further declines towards the psychological threshold of $1,500.
A possible trigger that may enhance Ethereum’s price this week is the imminent interest rate decision from the Federal Reserve on Wednesday. A dovish stance from the Fed could provide a lift for ETH and other cryptocurrencies.