On Monday, the price of Ethereum crashed through a critical support level. After invalidating an essential bullish pattern on a chart, this increased the risks for further losses.
EthereumETH) dropped to a low of $2,146, its lowest level since August last year. This is down by around 40% compared to its peak in December.
Ethereum price invalidates inverse H&S pattern
In recent months, Ethereum’s weekly chart has shown two different patterns. The first was a triple top formation that developed around $4,000, with the currency struggling to rise above it since last March.
The triple top is an established bearish indicator, and it can often lead to additional losses when the price falls below the neckline. The neckline for Ethereum was $2,146. This was the lowest price it reached in August of last year.
Ethereum has also formed a head and shoulder pattern in reverse, which is an indicator of bullishness. This pattern has a neckline with two shoulders and a top. In this instance, the neckline was located at $4,000; the shoulder on the right was $2,830 and the head at $2145. Ethereum, however, has invalidated this inverse pattern of head and shoulders by moving beneath the left shoulder.
The triple-top is now active, and Ethereum may face more declines. It could drop to its next support level at $1.520, which would be the lowest point since October 2023. Only a bullish breakout above $4,000 would confirm the strong bullish trend.
The ETH network faces major challenges
Ethereum’s struggles with its price are due to the fact that it is still battling significant issues. Data from TokenTerminal Data shows Ethereum to no longer be the most lucrative blockchain network.
Ethereum’s fees have amounted to $155 Million so far in this year. This is well behind Circle which earned $169 millions. Solana Tron Jito and Tether all posted fees of $261, 294, 303, and 414 millions respectively.
Ethereum’s dominance has also been eroded in the decentralized trading sector. Over the past seven days, decentralized exchanges built on Ethereum processed nearly $20 billion in transactions—lower than BNB Chain’s $25.7 billion and Solana’s $42 billion.
Tron (TRXIts lower transaction fees are the main reason why.
Additionally, the spot Ethereum ETFs have been met with a lackluster reception by Wall Street. Since September of last year, they only attracted $2.76 Billion in new inflows. Bitcoin funds secured more than $40 billion.
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Source: crypto.news
