Ethereum (ETH) Price Remains in a Bear Market, and Three Risky Chart Patterns Suggest That It May Experience a 20% Crash Soon

Ethereum (ETH), the second-biggest coin in crypto, retreated to $2,670 on Monday, down by over 35% from its highest level in December.

Ethereum (ETH) price continued its lackluster performance on Monday, trading at $2,670, down by more than 35% from December’s highs. As the second-biggest cryptocurrency struggles with strong competition in the blockchain industry, three risky chart patterns are emerging. These patterns suggest that ETH price may experience a 20% crash soon.

Ethereum price faces strong competition and outflows from ETFs

ETH price is facing increasing competition in the blockchain industry, particularly from layer-1 networks such as Berachain (BERA), Solana (SOL), and BNB Smart Chain (BNB). Despite expanding its capacity with layer-2 blockchains like Base and Arbitrum, Ethereum is losing market share in decentralized exchange (DEX) volumes.

DEX protocols on Ethereum handled volumes of $81 billion in the past 30 days. At the same time, layer-2 networks like Base (BASE) and Arbitrum (ARB) processed $35 billion and $28 billion, respectively.

Third-party data also reveals that Ethereum ETFs are not attracting as much interest as anticipated. In the past two trading days, they have experienced outflows, bringing the total cumulative outflows to $3.15 billion. In contrast, Bitcoin ETFs have seen massive inflows of almost $40 billion.

Moreover, Ethereum’s daily trading volume has continued to decrease, reaching $126 billion and dropping from December’s highs of $330 billion. Its revenue has also seen a significant decline, reaching $5 million on Sunday and falling from over $58 million in November last year.

Finally, Ethereum’s futures open interest has crashed from its 2024 highs, now showing an interest of $23.3 billion, down from this month’s highs of $35 billion.

Three risky Ethereum price patterns to watch

Observing the daily chart, the Ethereum price seems to be set up for further declines. On February 9, a death cross occurred as the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other on the daily chart.

Usually, a death cross, where the short-term moving average crosses below the long-term moving average, is considered a bearish signal by technical analysts.

Another pattern emerging on the ETH price chart is the rising wedge, which occurs when there are two ascending converging trendlines. This pattern is also considered bearish, and in most cases, its completion leads to a breakout in the direction of the prevailing trend.

Lastly, the Ethereum price chart also forms a bearish pennant pattern, which comprises a long vertical line and a triangle forming after the pole. In most cases, when this pattern completes, it tends to break out in the direction of the prevailing trend.

Considering these patterns and the bearish continuation nature of both the rising wedge and bearish pennant, we can anticipate further downside pressure on ETH price.

The next level to watch on the downside for ETH price is $2,166, which acted as the monthly low in March. A break below this level could lead to further declines, potentially targeting the round level of $2,000.