Ethereum Price Faces 3 Risky Chart Patterns, Potential 20% Crash Ahead

Ethereum continues to struggle in a bearish market, with recent chart patterns signaling that the cryptocurrency could face a significant decline of up to 20%. At the beginning of the week, Ethereum’s price dropped to $2,670, a fall of over 35% from its peak in December 2024.

This decline is occurring amid intense competition within the blockchain space. Ethereum is facing challenges from popular layer-1 networks like Berachain, Solana, and BNB Smart Chain, which have been gaining market share. Additionally, Ethereum is losing ground to layer-2 blockchains such as Base and Arbitrum, which have become favored due to their lower transaction fees. In the past month, Ethereum-based decentralized exchanges (DEXs) handled $81 billion in volume, while Base and Arbitrum processed $35 billion and $28 billion, respectively, highlighting a shift toward more affordable blockchain solutions.

Another sign of Ethereum’s struggles comes from its ETFs, which have not attracted the expected inflows. Over the last two trading days, Ethereum ETFs experienced outflows that totaled $3.15 billion. This stands in stark contrast to Bitcoin ETFs, which have seen nearly $40 billion in inflows, reflecting Ethereum’s reduced appeal to institutional investors.

Ethereum’s trading volume has also been on the decline, falling from a high of $330 billion in December to $126 billion. Revenue has followed a similar trend, with the network’s daily earnings dipping to $5 million on Sunday, compared to $58 million in November. Furthermore, Ethereum’s futures open interest has dropped significantly from a high of $35 billion earlier this month to $23.3 billion, signaling decreased market participation.

From a technical perspective, Ethereum’s price chart is showing several bearish signals. One of the most concerning is the “death cross,” which occurred on February 9. This happens when the 50-day moving average (MA) crosses below the 200-day moving average, and it is often seen as a signal of further downward momentum.

Additionally, Ethereum has formed a rising wedge pattern, characterized by two ascending converging trendlines. This pattern usually indicates that the price is losing momentum and could experience a sharp decline in the near future. Ethereum has also formed a bearish pennant pattern, which consists of a long vertical line followed by a symmetrical triangle. This pattern typically suggests that the price will continue to fall after a brief consolidation period.

If Ethereum breaks below the key support level of $2,166, which represents the lowest point this month, it could trigger further downside, possibly reaching the $2,000 mark. These bearish patterns, combined with Ethereum’s declining trading activity and market share, suggest that the cryptocurrency is facing significant challenges in the near term. Investors should remain cautious as Ethereum looks to navigate this tough market environment.