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Ethereum price has remained in a downtrend for the third consecutive week, as cautious sentiment among investors persists. This week, Ethereum (ETH) traded at $1,758, marking its lowest level since October 2023. The cryptocurrency has now declined by over 55% from its all-time high reached in November last year.

Factors Driving Ethereum’s Price Decline

Several factors have contributed to the ongoing slump in Ethereum’s price:

1. Declining Institutional Interest

Spot Ethereum ETFs have been experiencing significant outflows, signaling reduced demand from institutional investors. Over the past three weeks, outflows have totaled more than $513 million. Despite cumulative net inflows standing at $2.64 billion, recent outflows underscore waning confidence from Wall Street players.

2. Loss of Market Share

Ethereum is losing its dominance in key sectors of the blockchain ecosystem. For instance, Tron has overtaken Ethereum as the leading blockchain for Tether (USDT) processing, while layer-2 solutions like Base and Arbitrum continue to gain traction in decentralized finance (DeFi) applications.

3. Reduced Profitability

Ethereum is no longer the most profitable blockchain network. In 2023, it has generated $210 million in revenue, falling behind competitors such as Uniswap, Solana, Circle, Jito, Tron, and Tether. Historically, Ethereum held the position as the most lucrative blockchain ecosystem, but this trend has shifted.

4. Decline in Daily Active Addresses

According to recent data, the number of daily active Ethereum addresses has dropped significantly. As of March 12, daily active addresses stood at 293,000, compared to over 717,000 earlier this year. Additionally, social volume—a key metric indicating community engagement—has also been trending downward in recent months.

Technical Analysis: Ethereum Price Outlook

Examining Ethereum’s technical chart reveals a bearish trajectory. After facing strong resistance around $4,000, the asset formed a triple-top pattern, signaling a reversal. The price has since fallen below the critical support level at $2,135, which served as the neckline of the pattern.

ETH has also breached the 50-week moving average and the lower boundary of an ascending channel that connected key swing lows in July and November 2022, October 2023, and September 2024. This breach indicates that bearish momentum has taken control.

Key Indicators Signal Further Downside

  • Relative Strength Index (RSI): Currently at 33, the RSI indicates that Ethereum is no longer oversold, leaving room for further downward movement.
  • Awesome Oscillator: The indicator has moved below the zero line, reinforcing the bearish sentiment.

Given these signals, the path of least resistance for Ethereum appears to be bearish. The initial support level to monitor is $1,500. If this level is breached, the next psychological target could be $1,000, representing a 45% decline from current levels. On the upside, a move above the critical resistance level at $2,500 would invalidate the bearish outlook and suggest potential recovery.

Final Thoughts

Ethereum’s recent price action reflects a combination of reduced institutional interest, shrinking market share, and declining user activity. While some technical indicators suggest further downside, investors should monitor key support and resistance levels to gauge future movements. For those exploring cryptocurrencies and blockchain investments, staying informed about broader market trends will be crucial in navigating these volatile markets.

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