On-chain Activity Collapse: Is Ethereum In Danger?

Until today, the price of Ethereum remains locked below the $2,000 mark. It fluctuates between $1,810 and $1,960. According to several crypto analysts, this level of resistance seems insurmountable in the short term due to several converging factors. All the details in the following paragraphs!

Ethereum’s on-chain activity collapses: a bad signal for ETH crypto

Many expert analysts in cryptography agree on this point: the current dynamics of Ethereum resemble previous decline cycles. This indeed marks the 17th consecutive day of capital exits, the longest negative sequence since 2015.

According to the data , the Ethereum crypto network is experiencing a sharp slowdown:

• The trading volume on DEX has dropped by 30% over a week. It reached $16.8 billion;
• Ethereum’s TVL has lost 9.3% this month. It stands at $46.37 billion, which is 47% less than in January.

Some key crypto blockchain protocols are also showing a sharp decline:

• Maverick Protocol: -85%;
• Dodo: -45%;
• Lido: -30%;
• EigenLayer: -30%.

This reduction in Ethereum on-chain activity shows a gradual disinterest from users, but not only that! It also limits ETH’s ability to regain a bullish momentum.

Investor flight: Ethereum ETFs in crisis

The Ethereum ETFs are also experiencing a worrying financial hemorrhage. Over the past 7 days, these digital assets have indeed suffered cumulative outflows of $265.4 million.

• Outflows from Ethereum spot ETFs: $265.4 million;
• Outflows from other Ethereum products: $176 million;
• Total outflows of Ethereum ETP since early March: $265 million (the worst level ever recorded)

This capital outflow reflects an increased risk aversion among investors. This is likely related to:

• The persistent volatility of the crypto market;
• Macroeconomic uncertainties.

Bearish flag Ethereum: towards a drop to $1,530?

The technical analysis of the ETH price highlights the formation of a bearish flag. This pattern is characterized by a temporary upward channel in a downtrend. Specifically, it suggests a possible break below $1,880.

Crypto experts are considering two scenarios:

• Bearish scenario: If the $1,880 support is breached, ETH could drop to $1,530. This represents a decline of 20% from its current price.
• Bullish scenario: To avoid this drop , ETH needs to break the resistance at $1,970. This threshold coincides with the 50-day moving average.

With a RSI of 48, it confirms a neutral to bearish trend. This indicates that sellers are in control.

Is Ethereum at the end of a bearish cycle or on the verge of a new correction? The market evolution this week will provide crucial answers, particularly in light of this catastrophic scenario that worries experts .