Ethereum Faces Potential Price Crash to $1,500 Amid Declining Support
Ethereum’s price has dropped significantly, currently sitting at $2,430, which raises concerns of a potential decline to $1,500. The decline in fees generated and Ethereum’s weakening position in decentralized finance signify growing challenges for the network. Key support levels must be observed closely to forecast potential further drops in price.
Ethereum’s price has experienced a decline over the past three days, leading to concerns of a potential drop to $1,500. As of Wednesday, Ethereum (ETH) was trading at $2,430, reflecting a decline of over 40% from its peak in November, underperforming against Bitcoin (BTC) and other altcoins amid slowed ETF inflows and enduring ecosystem challenges.
Data from TokenTerminal indicates that Ethereum’s fee generation has declined significantly, with the network earning only $9.8 million last week compared to a peak of over $217 million last year. Other networks, including Tron (TRX), Solana (SOL), and Uniswap (UNI), have surpassed Ethereum in terms of fee generation.
The decentralized finance (DeFi) landscape has also seen Ethereum’s position weaken, with total value locked dropping by 12.5% in the last month to $54.32 billion. Despite still being the largest player in the sector, Ethereum faces growing competition from its layer-2 networks, which are processing substantial transaction volumes; for instance, Coinbase’s Base managed over $7.4 billion in volume recently.
The daily chart illustrates a concerning trend for Ethereum, marked by a series of lower lows and lower highs in recent weeks. Having fallen from $4,000 in November to $2,400, Ethereum has formed a death cross pattern, indicated by the intersection of the 200-day and 50-day moving averages. Furthermore, Ethereum’s price has dipped below critical Fibonacci retracement levels typically associated with pullbacks.
Consequently, there is a significant risk that Ethereum could experience a fall of approximately 35% to $1,530, marking its lowest price point since October 2023. The danger of such a decline increases if Ethereum breaches the current support level at $2,130, which reflects the lowest price observed in August.
In summary, the current trends indicate that Ethereum is facing significant downward pressure, risking a decline to $1,500 if key support levels are breached. Declining fees, a weakened position in decentralized finance, and growing competition from layer-2 networks highlight the challenges Ethereum must address to avoid further price reductions. Investors are advised to monitor support levels closely as developments unfold.
Original Source: crypto.news
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