Ethereum has experienced a significant price crash, making it one of the worst-performing blue-chip cryptocurrencies in February. The second-largest cryptocurrency by market cap dropped to a low of $2,075, its lowest level since January 2024, marking a nearly 50% decline from its peak in November 2023. This ongoing downtrend has shattered Ethereum’s six-year track record, making February 2024 its worst-performing month on record since 2018.
Ethereum’s February Performance and Market Context
Ethereum’s downturn has been more severe than its major competitors. Bitcoin has fallen by 25% from its highest level this year, while Ripple’s XRP has declined by approximately 40% over the same period. The sharp decline in ETH has been partly attributed to sustained outflows in exchange-traded funds (ETFs). Spot Ethereum ETFs have reported asset losses for six consecutive days, bringing total holdings down to $2.86 billion. Similarly, spot Bitcoin ETFs have seen over $4 billion in asset outflows.
Another factor behind Ethereum’s struggle is its declining market share amid growing competition from alternative layer-1 and layer-2 blockchain networks. Notable competitors include Solana and BNB Smart Chain, alongside layer-2 solutions such as Base and Arbitrum, which have gained traction in the DeFi and NFT sectors.
The broader crypto market sentiment has also contributed to Ethereum’s decline. The Fear & Greed Index has dropped to 33, signaling increased market uncertainty and fear among investors.
Technical Analysis: Death Cross and Key Support Levels Broken
Ethereum’s price movement has confirmed a bearish trend, as earlier predicted based on a bearish flag pattern. This pattern consists of a long downward movement followed by a period of consolidation, which later formed a rising wedge—a well-known bearish continuation pattern.
A particularly concerning development is Ethereum’s formation of a death cross, where the 200-day moving average has crossed below the 50-day moving average. This is widely considered one of the most bearish technical signals, suggesting further downside potential.
Additionally, Ethereum has lost a critical support level at $2,150, which previously acted as the lowest swing point in August and September 2023. This price level also served as the neckline of a triple-top pattern, which formed at $4,000. Losing this key support has intensified bearish sentiment.
Furthermore, the Average Directional Index (ADX) has surged to 40, indicating that downward momentum is strengthening.
Ethereum Price Forecast: More Downside Ahead?
Applying the measured move from the triple-top pattern, Ethereum’s price could potentially decline further. The distance between the triple-top pattern and the neckline at $2,150 is approximately 47%. If Ethereum follows this projection, its price could drop as low as $1,095 in the coming weeks.
While the current sentiment is largely bearish, long-term investors and analysts remain hopeful that Ethereum’s fundamentals, including its strong ecosystem and institutional adoption, may help it recover over time. However, in the short term, traders should brace for heightened volatility as Ethereum navigates through this critical phase.
Ethereum’s sharp February decline has broken a long-standing six-year trend, marking its worst monthly performance since 2018. With increasing competition from rival blockchain networks, sustained ETF outflows, and negative market sentiment, Ethereum faces a challenging path ahead. The formation of a death cross and the loss of key support levels further signal potential downside risks, possibly pushing ETH toward $1,095. Investors should monitor key technical indicators and macroeconomic trends closely before making trading decisions.
