Ethereum’s price remains deep in a bear market, having plummeted over 53% from its November high. The cryptocurrency has now fallen below the critical $2,000 support level, hovering near its lowest point since November 6.
Market Sentiment and ETF Outflows Weigh on Ethereum
Ethereum’s ongoing decline is largely attributed to weakening demand from Wall Street. Spot Ethereum ETFs have recorded net outflows for three consecutive weeks, reducing the total net inflow to $2.52 billion. As a result, total Ethereum assets under management have dropped to approximately $6.72 billion.
Adding to this bearish momentum is a deteriorating market sentiment. The crypto fear and greed index has now plunged to 21, indicating extreme fear. Historically, Bitcoin and other altcoins, including Ethereum, tend to struggle when investor confidence is weak.
Further exacerbating Ethereum’s decline is the recent sale of ETH tokens by the Ethereum Foundation. Last week, former Ethereum engineer Harikrishnan Mulackal expressed concerns over Ethereum’s future, citing a lack of clear leadership within the ecosystem.
Ethereum Faces Intensifying Competition
Ethereum’s network is also under pressure from rival layer-1 blockchains such as Solana and Binance Smart Chain (BSC). Data from DeFi Llama reveals that on Monday, Ethereum’s decentralized exchange (DEX) protocols processed $1.012 billion in token volume—significantly lower than BSC’s $1.63 billion and Solana’s $1.077 billion. The growing dominance of these networks is further challenging Ethereum’s position in the DeFi space.
Bearish Technical Patterns Signal Further Declines
Ethereum’s price crash has coincided with the formation of a triple-top pattern on the weekly chart, a historically bearish signal. The neckline of this formation was established at $2,126.
Moreover, Ethereum triggered a death cross on February 13, when the 50-day moving average crossed below the 200-day moving average. This crossover is widely considered one of the riskiest technical signals, often indicating prolonged downside momentum.
Now, Ethereum is showing signs of forming another bearish pattern— a pennant. This setup consists of a sharp downward move followed by a symmetrical triangle, typically signaling a continuation of the downtrend. With the pattern approaching its confluence point, a bearish breakdown could be imminent.
A drop below the year-to-date low of $1,757 could accelerate further declines, potentially testing the psychological support level at $1,500.
Potential Catalyst: Federal Reserve Decision
Despite the bearish outlook, one potential catalyst that could boost Ethereum’s price this week is the upcoming Federal Reserve interest rate decision. If the Fed adopts a dovish tone on Wednesday, it could provide temporary relief for ETH and other cryptocurrencies.
For now, Ethereum remains under significant pressure, and traders will be closely watching whether the current bearish patterns play out or if a fundamental shift in sentiment can help reverse the downtrend.
