Ethereum Price Poised for Additional Drop as Uncommon Pattern Develops
The price of Ethereum has been on a notable decline against Bitcoin, with an atypical chart pattern indicating potential further drops ahead.
Ethereum (ETH) has reached 0.01890, its lowest point since January 2020, now sitting 80% below its 2021 peak.
This decline comes as Ethereum continues to lose ground in key areas of the cryptocurrency market. Data from DeFi Llama shows that protocols on its network handled $56 billion in April, significantly less than Solana’s (SOL) $72 billion.
Furthermore, Ethereum is facing increased competition from layer-2 networks designed to improve scalability and efficiency while ensuring security.
Base, a layer-2 network built by Coinbase, processed transactions amounting to $20 billion in April. Unichain, a recently launched L2 network from February, managed $3.4 billion, and Arbitrum processed $14.3 billion. Ideally, these transactions would have been conducted on Ethereum.
Meanwhile, Ethereum’s standing has further weakened as Bitcoin’s market dominance rises. Currently, Bitcoin holds a 63% market share, climbing from a low of 18% year-to-date, marking its highest since November 2021. Conversely, Ethereum’s market dominance has fallen to 7%, its lowest since April 2018.
Technical Analysis of Ethereum Price
The weekly chart reveals that the ETH/BTC pair peaked at 0.08810 in December 2021 and has since declined 80% to the current level of 0.01890.
Ethereum is presently below both the 50-week and 100-week moving averages. Additionally, the Money Flow Index has continued its downward trend, now sitting at an oversold level of 14.
The Average Directional Index has climbed to 48.75, indicating that bearish momentum is still strong.
Significantly, the pair has formed an inverse cup and handle pattern, a commonly recognized bearish continuation signal. This chart formation displays a horizontal support line and a rounded top, typically suggesting further declines. If this pattern unfolds, the next key level to watch is 0.0070, which was the bottom in December 2016. A fall below this threshold could lead to a retest of the all-time low of 0.0019.