Ethereum (ETH) has declined for three consecutive days, forming a death cross pattern and raising concerns about a potential drop to $1,500 if key support levels are breached.
Ethereum’s Declining Price and Market Performance
Ethereum’s price fell to $2,430 on Wednesday, marking a 40% decline from its peak in November. The cryptocurrency has underperformed Bitcoin and other major altcoins, driven by slowing exchange-traded fund (ETF) inflows and persistent challenges within its ecosystem.
According to TokenTerminal, Ethereum’s fee generation has seen a significant downturn, earning just $9.8 million last week compared to over $217 million during its peak. Competing networks such as Tron, Jito, Solana, and Uniswap have outperformed Ethereum in transaction fees this year, intensifying the competitive landscape.
Ethereum’s Declining Dominance in DeFi and Layer-2 Networks
Ethereum’s total value locked (TVL) in decentralized finance (DeFi) has dropped 12.5% in the past 30 days to $54.32 billion, though it remains the largest player in the sector. Meanwhile, the stablecoin market capitalization has risen to $121 billion, but Ethereum’s market share continues to dwindle.
Ethereum has also lost transaction volume to layer-2 networks, including Base, Arbitrum, and Optimism. Coinbase’s Base network handled $7.4 billion in cryptocurrency volume over the past week, while Arbitrum recorded $5.7 billion—transactions that would have traditionally taken place on Ethereum’s mainnet.
Technical Indicators Signal a Possible Drop to $1,500
The daily price chart shows Ethereum forming a series of lower lows and lower highs, with prices falling from $4,000 in November to the current $2,400 level. A death cross pattern has emerged as the 200-day and 50-day moving averages intersect, signaling further downside potential.
Additionally, Ethereum has dropped below the 61.8% Fibonacci retracement level, a key support zone where pullbacks typically occur. The asset is now below the Murrey Math Lines oversold level, indicating increasing selling pressure.
Key Support Levels to Watch
- $2,130: The lowest support level from August 2024—if breached, ETH could see accelerated declines.
- $1,530: A potential 35% drop from current levels, marking Ethereum’s lowest price since October 2023.
The probability of Ethereum hitting $1,500 increases if the asset fails to hold above $2,130, triggering further sell-offs.
Ethereum’s recent price action, coupled with waning fee revenue, declining DeFi dominance, and increased competition from layer-2 solutions, suggests a bearish outlook. If Ethereum loses its current support at $2,130, the market could witness a significant downturn, potentially driving ETH towards $1,500 in the coming weeks.
