Ethereum (ETH) has taken a massive hit in recent weeks, falling close to the 0.01890 mark. This represents the lowest value for the digital token since January of 2020. Indeed, this current valuation has dropped an incredible 80% from its 2021 high-water mark. The new trend underlines a harsh eight-month streak of bearish sentiment for the world’s second largest digital currency.
The ETH/BTC pair rocketed to an all-time high of 0.08810 in December 2021. Since then, it has plummeted an incredible 80% to trade at only 0.01890. This significant decline further highlights the challenges Ethereum is up against as it seeks to continue growing faster than Bitcoin. Technical indicators are in strong agreement warning of further bearish confirmation. Ethereum remains below its 50-week and its 100-week moving average, suggesting persistent bearish momentum.
Ethereum’s Average Directional Index (ADX) has increased to 48.75, suggesting a very strong bearish downside trend. An ADX above 25 suggests there is a strong trend. The current low point only adds to the perception that the downward trend is set to continue. Further compounding matters, the Money Flow Index (MFI) has resumed downward trajectory – now sitting at an extreme oversold 14. This oversold condition typically foreshadows a broader prices reversal on the downside. When we look at other signs, it shows a large and persistent pressure to sell.
Ethereum’s dominance in the cryptocurrency market has taken a hit too, dropping down to 7%, the lowest since April 2018. This share drop reflects a historic shift in control of the market. It’s probably explained by the increasing prominence of standalone networks like the now-ubiquitous other layer-2 networks and several other blockchains altogether.
Ethereum may be fighting for relevance, but business is booming on layer-2 networks that operate atop it. Specifically, Base, the layer-2 network spun up by Coinbase, settled $20 billion in transactions just in the month of April. As a comparison, Unichain, yet another L2 network, only handled $3.4 billion. Arbitrum processed 4.6X more. Transaction volumes on these networks is an indication of the healthy interest in Ethereum’s underlying technology. Despite ETH continuing to lose value, this excitement continues.
