Ethereum Price Forms Alarming Pattern as Key Risks Emerge

Key Insights

• Ethereum price has formed a rising wedge pattern on the daily chart.
• The token has formed a giant bearish pennant pattern.
• Spot Ethereum ETF inflows have faded this month.

Ethereum price stalled near $2,300 after repeated failures to reclaim higher resistance zones. The broader setup now points to rising downside pressure as ETF demand weakens and Ethereum network activity slows.

Ethereum Price Technical Analysis: At Risk of a Bearish Breakdown

The daily chart shows that ETH has traded sideways over the past few weeks. This consolidation happened after finding a substantial resistance level at $2,400, where it failed to move above.

The token has struggled to move above the 100-day Exponential Moving Average (EMA), a sign that bears are prevailing.

The Ethereum token has also formed a rising wedge pattern, which is characterized by two rising and converging trendlines. The lower line connects the lowest point since February, while the upper side joins the highest points since March.

Therefore, the most likely Ethereum price prediction is bearish, with the next key target being the psychological level of $2,000. A move below that price will point to more downside, potentially to the year-to-date low of $1,795, its lowest level in February.

However, on the other hand, a move above the key resistance level at $2,400 will be a sign that bulls have prevailed, which will lead to more gains, potentially to the 50% Fibonacci Retracement level at $3,362, which is about 45% above the current level.

Spot Ethereum ETF Demand Weakens

Falling demand from U.S. investors remains one of Ethereum’s biggest risks. Data shows spot Ethereum ETFs recorded more than $130 million in outflows on Tuesday, sharply above the previous session’s $16.8 million.

A key one is the fact that demand from American investors has continued falling this year. Data reveals that the spot Ethereum ETFs had over $130 million in outflows on Tuesday, much higher than the previous day’s $16.89 million.

These numbers have brought the cumulative Ethereum ETF inflows this month to $24.7 million, a sharp reversal from the previous month’s $355 million.

Spot Ethereum ETFs have attracted $11.9 billion since launch and now hold over $13.3 billion in assets. BlackRock’s ETHA has $7.1 billion in assets, much higher than Franklin Templeton’s EZET, which has $45 million in assets. ETHA has an expense ratio of 0.25%, while EZET is the cheapest with 0.19%.

Spot Ethereum ETF inflows usually lead to more gains, as they mean that institutions like Wells Fargo are in an accumulation mode.

On top of this, data compiled by StakingRewards shows that staking inflows has continued falling recently. The amount of Ethereum tokens held in staking pools dropped by 282k ETH tokens in the last 30 days. At the current price, these tokens are worth over $650 million, with the staking ratio falling to 32%.

Ethereum Ecosystem Growth Has Stalled

Meanwhile, third-party data shows that Ethereum is struggling. For example, data shows that the total value locked (TVL) has crashed to $45 billion, its lowest level since May 2nd last year. It has dropped from over $95 billion in September last year.

Ethereum’s TVL has crashed in the past few months because of the recent KelpDAO hack that led to millions of dollars in losses. The same is happening in the stablecoin industry, whose supply has stagnated at $45 billion. It has remained under pressure in the past few weeks.

Fee generation weakened further. Ethereum generated only $39 million in chain fees during the first quarter, marking one of its weakest quarterly performances in years.

At its peak, Ethereum generated more than $4.3 billion in monthly fees during the previous market cycle.

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