Ethereum Locked Up, needs Jail Break Run
The super altcoin experienced a significant bearish breakdown over the weekend, reaching a low of $1,811 on Sunday, its lowest level in three weeks. ETH has dropped more than 57% from its peak in 2024.
The digital asset plunged below the 50-week and 200-week Exponential Moving Averages. A crossover of these two averages will be a death cross, a strong bearish pattern.
ETH price has also plunged below the 61.8% Fibonacci Retracement, commonly known as the golden ratio, at $1,950. The Relative Strength Index (RSI) and the MACD indicators have all pointed downwards. The coin has also formed a bearish flag chart pattern, a popular continuation sign.
The altcoin’s decline is attributed to challenges within its ecosystem and ongoing macroeconomic factors. Specifically, the altcoin faces high selling pressure due to persistent outflows from spot Ethereum ETFs.
Data from SoSoValue indicates that ETH ETFs have recorded net outflows every day this month, except for March 2 and 28. These funds have collectively had a net inflow of only $2.4 billion, bringing their total net assets to $6 billion.
Ethereum ETFs have largely underperformed due to insufficient demand from Wall Street investors. Many of these investors prefer to hold and stake ETH, earning a favorable staking return of about 3%.
The price of ETH has fallen due to the increasing competition from the layer-1 and layer-2 sectors. Most of this competition arises from layer-2 networks like Base and Arbitrum, which are recognized for their higher transaction speeds and lower costs.
Ethereum also faces heightened competition from layer-1 networks such as Sui, Solana, and BNB Chain. These elements contribute to analysts’ warnings that the ETH price could decline further. For instance, analysts at Standard Chartered have reduced their target by 60% to $4,000
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