Ethereum, the second-largest cryptocurrency by market capitalization, is currently facing significant bearish pressure as it navigates a pivotal juncture in its price trajectory. After a recent decline in bullish momentum, the cryptocurrency has slid below the critical support level of $1,820, igniting concerns among traders and analysts alike. A breakdown from a symmetrical triangle pattern, which often hints at a continuation of the prevailing trend, has intensified this bearish outlook. Analysts, including noted market commentator Bit Bull, have flagged this development as a harbinger of further downside, possibly dragging Ethereum down to the $1,600 level.
The technical analysis surrounding Ethereum underscores a troubling lack of bullish impetus since the breakdown occurred. Instead of bouncing back with renewed vigor, the asset has been unable to attract volume-driven buying, which typically signals a healthy demand from traders. This absence of robust engagement points to a weak sentiment prevailing in the market. Notably, attempts to test the boundaries of the triangle’s decline did not yield a reversal, reinforcing the bearish outlook for Ethereum as it continues to struggle in regaining lost value.
Bearish Patterns Extend to the ETH Dominance Chart
Compounding the bearish sentiment surrounding Ethereum’s price is the behavior observed in the ETH dominance chart. Analysts have identified the emergence of a descending triangle, another pattern often seen during bearish phases. This setup suggests that Ethereum’s influence within the broader cryptocurrency market may wane, especially if alternative cryptocurrencies start gaining traction. As capital begins to shift toward these rising altcoins, the potential for Ethereum’s price to experience downward pressure increases, suggesting a limit on new inflows into the Ethereum market.
Chart 1: ETH/USD, published on TradingView, 6th April, 2025.
The signals from the dominance triangle indicate a precarious situation for Ethereum, as a failure to develop sustained momentum could lead to further losses in market share. The technical metrics from the dominance chart align closely with price trends, solidifying the perspective that Ethereum may continue to face pressure. With a cautious stance from institutional investors and a lack of significant bullish triggers, traders are likely to remain vigilant, preparing for a potential drop toward the $1,600 mark if current trends persist.
On-Chain Data Confirm Weak Fundamentals
A closer examination of on-chain metrics furthers the case for a bearish outlook on Ethereum. A significant red flag is the marked decline in the number of potential addresses engaging with the network, which directly reflects diminishing consumer interest and participation. A consistent pattern shows that reductions in user activity correlate with price drops as lower engagement typically indicates waning investor confidence. Additionally, the post-EIP-1559 environment has not been favorable for Ethereum’s deflationary objectives, as the reduction in price does undermine its appeal in the deflationary context.
Compounding these concerns is the observed increase in Ethereum’s supply, which has surged since the recent network upgrades. This scenario stands in stark contrast to earlier expectations that Ethereum would become increasingly deflationary over time. Instead, a rising supply may deter large-scale accumulation, leading to a bearish sentiment amongst potential long-term holders. Together, declining address activity, stagnant prices, and increasing supply form a recipe for continued pressure on the asset unless positive metrics emerge to reignite interest.
Support Zones Offer Possible Rebound Opportunities
Despite the growing bearish patterns, there remain pockets of optimism. According to reports from financial analysts at Standard Chartered, Ethereum still holds the potential to reach as high as $4,000 by the end of the year, albeit this target has been adjusted down from an earlier optimistic forecast of $10,000. Currently, Ethereum is clinging to a critical support zone around the $1,800 mark. Analysts are hopeful that this support level might be resilient enough to trigger a substantial reversal, especially if renewed buying interest from institutional players and large holders can breathe life back into the market.
The current trading volume of nearly $7 billion reflects a persistent level of interest among traders, although overall market sentiment is notably cautious. For any potential upward movement to gain traction, improvements in on-chain metrics and technical patterns will be essential. Without these catalysts, the optimistic projections may remain out of reach, leading many traders to reevaluate their strategies.
Ethereum Faces Crucial Juncture
As Ethereum’s price hovers near significant support levels following a pronounced bearish breakdown, the current landscape presents both challenges and opportunities. The technical charts are painted with bearish indicators—most notably, the symmetrical and descending triangles—suggesting a potential for further decline. Simultaneously, concerning patterns in on-chain data indicate weak fundamentals that could expedite a move down towards that ominous $1,600 threshold.
However, it is important to acknowledge that a glimmer of hope exists. Should the $1,800 support prove resilient, and if trader sentiment experiences a resurgence, Ethereum could potentially stave off deeper losses and embark on a recovery journey in the long run. For now, traders and market participants should closely monitor technical setups and on-chain data, as these factors will play an instrumental role in determining Ethereum’s price trajectory in the weeks to come.
