Here’s why the price of Ethereum seems to be below $2k.
Ethereum onchain data and the bearish pennant on the daily chart suggest that bears may target the $1,100 level. Does a dip into that zone represent a generational buying opportunity?
Ether (ETH) price has posted a bearish pennant on the daily chart, a technical chart formation associated with a strong downward momentum. This weak technical setup and declining network activity may indicate a continuation of ETH's bearish trend and possibly send the altcoin price towards $1,100.
A bear pennant pattern is a bear setup that occurs after a price consolidation following a sharp decline in price.
The currency will resolve after the price breaks below the lower pennant line at $1,950. If this happens, the ETH/USD pair may drop as high as the previous decline. This puts ETH's price target at $1,100, a 43% drop from its current price.
RELATED: Ether bulls target $2.5K on ETF launch, RWA growth fuel optimism
According to crypto analyst Krypto Patel, ETH price should hold the $1,800 support and reject the pennant.
Declining Ethereum network activity indicates downward pressure
Ether's price weakness was also reflected in its onchain activity, with Ethereum's daily transaction count falling to 1.95 million on Wednesday, down 33% from 2.9 million on February 5.
A similar sharp decline was seen in Ethereum's daily trading count in January 2024, which coincided with a 30% decline in the altcoin.
Analyzing the Total Value Locked (TVL) on the network's smart contracts also shows a decline in Ethereum network activity.
Ethereum's TVL fell from $70 billion at the beginning of the month to $54.5 billion on Wednesday, a drop of more than 22 percent in more than two weeks.
Negative signs include a 26% drop in deposits on Uniswap's decentralized exchange (DEX) and a 35% drop on Ether.fi and EigenLayer.
Daily trading volume on Ethereum-based DEXs fell to $1.5 billion from $3.72 billion in the same period.
In addition, global Ethereum investment products saw a total net outflow of $85.1 million between February 9 and February 13, adding to the price drop.
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