Ethereum could face a drastic decline to as low as $200–$400 if the crypto market has indeed entered a prolonged bear cycle, according to Quit, Vice President of Blockchain at Yuga Labs. His remarks suggest that Ethereum’s recent downturn may be just the beginning of a more significant drawdown.
Bear Market Concerns and Historical Trends
In a March 11 post on X, Quit questioned the optimistic price targets for Ethereum. While many traders see $1,500 as a likely floor, he warned that historical bear market trends suggest Ethereum could experience an 80–90% correction from previous highs. This would mean a potential bottom in the $200–$400 range, should the current decline continue.
Ethereum has already seen a sharp drop, losing 30% in a week and over 50% in the past three months. However, Quit noted that such losses do not necessarily indicate that the worst is over, as true bear markets have historically erased much more value. Despite this outlook, he remains personally bullish but advises investors to reconsider their allocations if they are not prepared for further downside.
Ethereum Whales Brace for Lower Prices
Meanwhile, large Ethereum holders, or “whales,” are adjusting their positions in anticipation of further declines. On March 11, Lookonchain flagged a major transaction in which a wallet linked to the Ethereum Foundation deposited 30,098 ETH (~$56.08 million) into MakerDAO to lower its liquidation price. This wallet now holds 100,394 ETH ($182 million) on Maker, with a liquidation threshold of $1,127.
In a separate move, an early Ethereum ICO participant transferred 7,000 ETH (~$12.94 million) to Kraken, potentially signaling selling pressure.
Ethereum’s Struggles: Network Activity, Institutional Demand, and Competition
Several factors are contributing to Ethereum’s struggles:
- Declining network activity and lower gas fees have reduced the impact of the EIP-1559 burn mechanism, causing Ethereum to lose its deflationary status. Its supply is now growing at an annual rate of 0.7%.
- Institutional demand has weakened, with spot Ethereum ETFs witnessing $119 million in net outflows over the past week, per SoSoValue data. Analysts attribute this to the lack of staking incentives for ETF investors.
- Competition from newer, faster blockchains is threatening Ethereum’s dominance in DeFi and perpetual futures trading. Platforms like Hyperliquid and Berachain have attracted billions in total value locked (TVL), fragmenting Ethereum’s layer-2 ecosystem.
Will Ethereum Recover?
Without staking incentives for ETFs and a resurgence in DeFi demand, Ethereum may struggle to reclaim its $2,600 support level. As of press time, ETH is trading at approximately $1,850, with $246 million in liquidations over the past 24 hours, according to Coinglass data.
While it remains uncertain if Ethereum will see a reversal in the near term, Quit’s warning underscores the risks of further downside in a potential extended bear market.
