Catastrophe alert: Ethereum currency value plummeting further due to formation of unusual pattern
Ethereum's Slump and Struggle Against Bitcoin
Ethereum, with a drop to 0.01890, is experiencing a significant downturn and hasn't been this low since January 2020, marking an 80% plunge from its 2021 high. This descent occurs as Ethereum faces a series of challenges and loses ground in key sectors of the crypto industry.
For instance, DeFi Llama data reveals that protocols in Ethereum's network dealt with $56 billion in April, trail Solana's $72 billion. Moreover, Ethereum is also losing its grip to layer-2 networks, like Base, Unichain, and Arbitrum, which have improved scalability and speed without compromising security. In theory, Ethereum should have been handling these transactions.
Bitcoin's dominance in the market continues to expand. With a market share of 63%, Bitcoin's dominance has climbed from a year-to-date low of 18% and peaked at its highest level since November 2021. In contrast, Ethereum's dominance has sunk to 7%, its lowest point since April 2018.
Technical Analysis of Ethereum Price
The weekly chart depicts the ETH/BTC pair reaching a peak of 0.08810 in December 2021 and subsequently plummeting 80% to its latest 0.01890 level.
Ethereum persists below both the 50-week and 100-week moving averages. Furthermore, the Money Flow Index has continued diving and now lies at an oversold level of 14. The Average Directional Index has risen to 48.75, signifying that bearish momentum is potent.
Crucially, the pair has formed an inverse cup and handle pattern, a well-known bearish continuation signal. This pattern exhibits a horizontal support line and a rounded top, often leading to further declines. If this pattern unfolds, the next level to monitor is 0.0070, marking the bottom in December 2016. A dive below that could set the stage for a potential retest of the all-time low at 0.0019.
So, what does the future hold for Ethereum? Although Ethereum may appear undervalued based on its valuation relative to Bitcoin via the ETH/BTC Market Value to Realized Value (MVRV) ratio, factors such as supply pressure, low demand, and subdued network activity are impeding its recovery, contributing to its underperformance. Ongoing challenges in technological advancements, scalability, and investor preferences have a substantial impact on Ethereum's position in the crypto industry[2][3][4].
- Despite the slump in Ethereum's price, Bitcoin's dominance in the market continues to grow, with a recent market share of 63%.
- Ethereum's dominance, on the other hand, has slipped to 7%, its lowest point since April 2018, indicating a significant shift in market preferences.
- In the DeFi sector, Solana outperformed Ethereum in April, handling $72 billion in transactions compared to Ethereum's $56 billion.
- Layer-2 networks like Base, Unichain, and Arbitrum, offering improved scalability and speed, are gaining traction, potentially taking business away from Ethereum.
- Coinbase, a popular cryptocurrency exchange, offers trading for Bitcoin, Ethereum, Solana, Tron, XRP, and other cryptocurrencies, reflecting the diverse landscape of the crypto finance industry.
- Technical analysis suggests that Ethereum could see further declines, with the formation of an inverse cup and handle pattern on the ETH/BTC pair and bearish indicators such as the Money Flow Index and Average Directional Index.
