Ethereum price has crashed into a bear market after falling by 30% from its highest level this year. ETH was trading at $3,475, and has formed a risky pattern that points to more downside over time as institutional demand wanes.
Ethereum price has formed a death cross pattern
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The daily timeframe chart shows that the price of Ethereum has been in a strong downward trend in the past few months, moving from a high of $4,950 in August to $3,473 today.
Ethereum has now formed the highly bearish death cross pattern, which happens when the 50-day and 200-day Weighted Moving Averages (WMA) cross each other. This pattern often leads to more downside.
The coin has also formed a head-and-shoulders pattern with a slanted neckline. Most recently, it has formed a bearish flag pattern, which is made up of a vertical line and a channel.
Ethereum price has moved below the 38.2% Fibonacci Retracement level at $3,580. Moving below this level normally leads to more downside, potentially to the 50% and 61.8% retracement levels.
Therefore, the most likely Ethereum price forecast is bearish, with the next key support level being the psychological level at $3,000. A move above the death cross point at $3,800 will invalidate the bearish outlook.
ETH price chart | Source: TradingView
Why ETH price is falling
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There are a few fundamental reasons why Ethereum price is crashing today. First, its fundamentals are deteriorating, with data compiled by DeFi Llama showing that the total value locked (TVL) dropped by 16% in the last 30 days to $157 billion. The TVL is an important number that looks at the amount of money deployed in its smart contracts.
More data compiled by Nansen shows that the number of active addresses and transactions in Ethereum has plunged in the past few months. There were 45.2 million transactions in the network in the last 30 days, down by 23%. Its fees dropped by 42% to $27 million, while active addresses dropped to 8.2 million.
In contrast, other networks like Tron and BNB Chain are doing well, with their transactions rising by 38% and 35%, respectively in the last 30 days.
Ethereum price has also plunged because of the ongoing performance in the exchange-traded funds (ETF) market. Data shows that these funds have had $107 million in outflows this week after they shed $507 million last week.
BlackRock’s ETHA ETF is leading in terms of assets with $13.8 billion, while Grayscale’s ETHE has $3.38 billion.
Ethereum price has also crashed as treasury companies go through major challenges. Tom Lee’s BitMine stock price has plunged from $160 in July to $40 today, while SharpLink has dropped from $123 in May to $11 today.
The crash in Ethereum treasury stocks is a major blow to the coin as it means that they will acquire less tokens going forward.
Ethereum price is also falling as its open interest continues falling. It has plunged to $39 billion, down from $70 billion in August this year. This open interest has plunged after the large liquidation event that happened in October, when positions worth over $3.8 billion were liquidated within a day.
Ethereum’s weighted funding rate has continued to move sideways in the past few months, a sign that liquidity has largely dried in the past few months.
More data shows that investors are unstaking their Ethereum coins. According to StakingRewards, there was a net decrease of 5.2k ETH worth $18 million staked Ethereum in the last 30 days. A significant decline in the amount of staked Ethereum is a bearish sign as it means that investors are selling their tokens.
