Earnings Ether might sink below $1,100 as its market dominance slips to multiyear low. Tough sell, technically. Speaking of the chart, a bear flag pattern is forming on the daily that suggests another strong move down if price breaks under $1,600. This drop seen is placed on the lackluster institutional demand, a turtle pace derivatives market, and growing competition from other layer-1’s.
On April 9th, Ethereum’s market dominance reached its lowest multiyear low at 7.18%. This analysis is possible thanks to data from Cointelegraph Markets Pro and TradingView. This is just above the all-time low of 7.09% set in September 2019. Competitor layer-1 tokens, such as BNB Chain’s (BNB) token and Solana’s (SOL) tokens, are up in market dominance since 2023. This shift has resulted in an impressive drop for other tokens.
Bear Flag Pattern Emerges
Ether’s price action for the last three weeks has created a clear potential bear flag pattern on the daily chart. The flag’s bottom line is at $1,600. If the daily candlestick ends below this barrier, this will confirm the start of an intense downward move. With these changes, the price could realistically fall to $1,100.
The $1,100 target is set according to the height of the tallest flagpole. That’s a 33% decrease from the price they’re currently paying. The relative strength index (RSI) is still under 50, showing that the market trend is still oriented to the downside.
Analyst's Take on Ethereum's Dominance
Ethereum dominance is so very close to registering new all-time lows - Rekt Capital
Renowned crypto analyst Rekt Capital cautioned that Ethereum’s dominance could soon be establishing new all-time lows. This statement serves as a reminder to the recently increased anxieties around Ethereum’s dominating market position. Her analysis serves as a warning that, if allowed to continue, even more decline is likely if these trends continue.
Factors Contributing to Ethereum's Underperformance
Several factors contribute to Ethereum's underwhelming performance. These are lackluster institutional demand as shown by outflows from negative ETF flows. A lackluster derivatives market has been a big part of that equation as well. The problem is made all the worse by rising competitive pressures from other layer-1 blockchains.
These challenges collectively impact Ethereum's market dominance. As new and better blockchains continue to be developed and take hold, Ethereum will feel more pressure to hold onto its crown. Together these factors make a very ominous picture for Ethereum’s near-term prospects.
