Ethereum Price Decline

Ethereum price has crashed over 52% from its December peak of $4,105, now trading at approximately $1,970 as of March 20. This significant drop makes it one of the worst-performing blue-chip cryptocurrencies in the market.

Reasons for the Decline

Concerns about Ethereum’s future persist, leading Standard Chartered analysts to downgrade their price estimate by 60%, from $10,000 down to $4,000. They cited increased competition from layer-1 and layer-2 networks impacting Ethereum’s revenue growth.

Layer-2 networks like Coinbase’s Base, Arbitrum, and Optimism are attracting users with lower fees. Recent data from DeFi Llama revealed that Ethereum’s DEX protocols accounted for over $9.8 billion in trading volume over the past week. In comparison, Arbitrum and Base handled volumes of approximately $2.87 billion and $2.8 billion, respectively, which would have traditionally been conducted on Ethereum’s mainnet.

Additionally, Ethereum faces fierce competition from layer-1 networks such as Solana (SOL) and BNB Chain, which collectively handled over $13 billion in DEX volume last week.

The outlook also looks bleak for Ethereum regarding emerging technologies like Real World Asset tokenization, where higher fees and slower transaction speeds may drive developers toward more scalable and cost-effective networks like Mantra (OM) and BNB Chain.

Weak On-Chain Metrics

On-chain data indicates a decline in active addresses on Ethereum, dropping from 717,000 earlier this year to 461,000 last Wednesday. Ethereum’s realized cap HODL wave has also fallen to its lowest level since last August, suggesting that long-term holders are beginning to sell.

The 365-day mean dollar invested age (MDIA), which measures how long coins remain in an address, is also at September lows.

Technical Analysis

From a technical perspective, the ETH price chart indicates a strong downward trend. The decline began after a triple-top formation at $4,000, with a neckline at $2,120. A death cross pattern emerged when the 50-day and 200-day moving averages crossed, often leading to further downward momentum. Key oscillators like the Relative Strength Index and Percentage Price Oscillator have also declined.

It seems probable that ETH will continue to fall, with sellers targeting a psychological support level of $1,500, approximately 25% lower than current prices.

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