Ethereum Price Faces Cursed Downtrend: Analyst Insights for 2025

Ethereum (ETH) is currently experiencing a troubling downtrend, which analysts suggest could continue well into 2025. Historical patterns indicate that previous dips into oversold conditions have not marked a definitive bottom, with each instance followed by another leg lower, reflecting persistent bearish momentum. This article delves into the current state of Ethereum’s price, the implications of its performance against Bitcoin (BTC), and what investors should consider moving forward.

Historical Patterns and Current Trends

Since mid-2024, the ETH/BTC pair has undergone repeated breakdowns, with losses of approximately 13%, 21%, 25%, and 19.5% occurring in rapid succession. This consistent decline raises concerns about Ethereum’s ability to recover. The 50-day and 200-day Exponential Moving Averages (EMAs) are trending lower, confirming the lack of bullish strength in the market.

X-based market analysts have highlighted Ethereum’s negative price performance, particularly noting that the ETH/BTC pair has failed to confirm a bullish divergence on its weekly chart. A bullish divergence occurs when the price makes lower lows while the Relative Strength Index (RSI) makes higher lows, suggesting potential upward momentum. However, in Ethereum’s case, this divergence has not materialized, further emphasizing the bearish sentiment surrounding the cryptocurrency.

Comparative Analysis with Bitcoin and Market Sentiment

The downtrend in the ETH/BTC pair stands out when compared to the broader cryptocurrency market. Recent data indicates persistent outflows from US-based spot ETH ETFs, alongside negative on-chain data. For instance, net flows into spot Ether ETFs decreased by 9.8% in March, totaling $2.54 billion. In contrast, spot Bitcoin ETF net flows increased by 2.35% during the same period, reaching $35.74 billion.

Moreover, Ethereum’s mainnet activity, as measured by daily median gas consumption, has plummeted to around 1.12 GWEI as of March, a staggering decline of nearly 50 times compared to the previous year. Despite a second rally in ETH prices towards the end of 2024, mainnet activity, as indicated by gas consumption, has not fully recovered. Data analytics platform Nansen has reported these findings, expressing a cautiously bearish outlook on Ethereum due to its unfavorable risk/reward ratio compared to Bitcoin and lower-valued altcoins with niche market focuses.

Trading Activity and Market Dynamics

In terms of trading activity, Bitcoin futures volume has rebounded by 32% from its lows on February 23, reaching $57 billion on March 18. In contrast, Ethereum’s trading activity has remained relatively flat, according to on-chain data platforms. This disparity in trading dynamics further highlights the challenges Ethereum faces in regaining bullish momentum.

Technical Analysis: Bear Pennant Pattern

The ETH/BTC pair is currently forming a bear pennant pattern on the daily chart. This pattern is characterized by a period of consolidation within converging trendlines following a steep decline. A bear pennant typically resolves when the price drops below the lower trendline, potentially falling by as much as the previous downtrend’s height. Applying this technical analysis to the ETH/BTC pair suggests a downside target of 0.01968 BTC for April, representing a 15% decline from current levels.

Key Indicators and Future Outlook

Furthermore, the 50-day and 200-day EMAs remain in a sharp downward trajectory, with the ETH/BTC pair trading significantly below these key levels. This signals a persistent bear market structure, raising concerns about Ethereum’s short-term prospects. Despite the looming downside risk, a bullish invalidation could occur if the ETH/BTC pair breaks above the pennant’s upper resistance and flips the 50-day EMA into support.

Conclusion: Navigating the Ethereum Market

In conclusion, Ethereum’s price is currently entrenched in a challenging downtrend, with analysts predicting that this trend could persist into 2025. Investors should remain vigilant and conduct thorough research before making any investment decisions. As always, every investment and trading move involves risk, and understanding the market dynamics is crucial for navigating these turbulent waters.