Bitcoin may be soaring, but Ethereum is facing a challenging time in the market. While Bitcoin is following the parabolic rise of gold, Ethereum is stuck in a persistent downtrend. As the second-largest cryptocurrency, valued at around $228 billion with a daily trading volume of $19 billion, Ethereum has been experiencing a multi-week correction.
The big question on everyone’s mind is – how much lower can Ethereum go?
Let’s delve into the details.
Ethereum has recently lost two major support levels – $3,200 and $2,200. Over the past three weeks, ETH has seen a decline of over 33%, currently trading near $1,891 as of early Friday, March 14, during the European session. The broader financial market is also under pressure, with major stock indexes like the S&P 500 sliding due to uncertainty from U.S. tariff wars. This has led long-term investors to seek refuge in safer assets like gold and stablecoins.
On-chain data from Glassnode indicates a growing fear among long-term Ethereum holders. Additionally, U.S. spot Ether ETFs have been witnessing consistent cash outflows, marking their third consecutive week of withdrawals. Just on Thursday, net outflows totaled approximately $73 million.
From a technical perspective, Ethereum appears heavily oversold compared to Bitcoin. The cryptocurrency has been struggling to break past the $4,000 resistance level over the past year, facing continued bearish pressure. To avoid further declines towards $1,500, Ethereum must maintain its current support level. The ETH/BTC pair is also testing a crucial support level around 0.023, which could potentially restore bullish sentiment in the near future.
Despite the price slump, Ethereum remains a leader in decentralized finance (DeFi) with around $45 billion in total value locked (TVL) and a stablecoin market cap exceeding $123 billion. However, competition from other layer-one (L1) blockchains like Solana is intensifying.
In an effort to stay ahead, Ethereum developers are actively working on the upcoming Pectra upgrade. Ethereum Foundation core developer Tim Beiko recently announced that the third testnet, Hoodi, will launch by mid-April to finalize preparations for the upgrade.
While Ethereum may be going through a rough patch, the competition for blockchain dominance is far from over. Stay tuned as the cryptocurrency market continues to evolve and adapt to changing dynamics.