Ethereum price is in a steep downward trend and could be nearing a make-or-break level as concerns about its network remains. ETH is in its fifth consecutive month in the red, and is now hovering at its lowest level since February 2020. It has plunged by over 87% from its all-time high.
Ethereum vs Bitcoin price is crashing
The ongoing ETH price crash has also affected its market dominance, which has collapsed to the lowest level in years. Worse, for once, there is a high likelihood that XRP will pass it to become the second-biggest cryptocurrency in the industry. That’s because its market cap stands at $191 billion, while XRP has a valuation of $145 billion.
A closer look at the ongoing Ethereum meltdown shows that it started in September 2022 when it implemented The Merge. The Merge between the traditional proof-of-work Ethereum and the Beacon Chain helped to transition it into a proof-of-stake network that is faster and more environmentally friendly.
Ethereum has lost its market share against other networks over time. It has lost share against other layer-1 networks like Solana, BNB Chain, Sui, and Aptos. Most importantly, it has lost its market share against layer-2 networks like Base, Arbitrum, and Optimism. In a note to Invezz, Will Hamory, of Financial Lead said:
“Ethereum is being killed by layer-2 networks on its ecosystem. These chains are significantly faster, and most importantly, users love them for their significantly lower fees. While Ethereum fees have dropped lately, it is not cheap enough. Time is running out for the network.”
Read more: Ethereum price prediction: here’s why ETH is heading to $1,500
Spot Ethereum ETFs have also not succeeded as Wall Street investors have remained in the sidelines. These funds have just $5.56 billion in assets after having a cumulative inflow of just $2.34 billion. This is a sign that Wall Street investors are not interested in ETH.
A likely reason for this is that Ethereum ETFs don’t allow staking, which provides a regular monthly payment. Data shows that the ETH yield now stands at over 8%. As such, many Ethereum investors prefer buying and staking it in exchanges like Coinbase and Binance.
Ethereum price technical analysis
ETH price chart | Source: TradingView
The monthly chart shows that the ETH price sell-off started when it formed a double-top pattern at 0.0850 between 2021 and 2023. It has moved below the neckline at 0.04897 in June 2022.
After that, the ETH/BTC pair has formed an inverse cup and handle pattern, a popular continuation sign. It has also continued falling and moved below the 50-month moving average.
Ethereum is now nearing the crucial support level at 0.01623, the lowest level in September 2019. A move below that level will point to further downside, potentially to the all-time low of 0.0016, which is about 92% below the current level.
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