{"id":21420,"date":"2025-04-10T05:16:58","date_gmt":"2025-04-10T05:16:58","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=21420"},"modified":"2025-04-10T05:16:58","modified_gmt":"2025-04-10T05:16:58","slug":"3-reasons-why-ethereum-price-keeps-falling","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=21420","title":{"rendered":"3 reasons why Ethereum price keeps falling"},"content":{"rendered":"
\n

<\/p>\n<\/p>\n

\"3<\/p>\n

Ether\u2019s (ETH<\/a>) most recent sell-off saw it lose the crucial $1,500 support level, and a number of technical indicators suggest that ETH may witness a deeper correction before embarking on a sustained recovery.<\/p>\n

Data shows Ether\u2019s price dropped<\/a> below its realized price \u2014 an onchain metric that recalculates the market value of a cryptocurrency based on the price at which each coin last moved on the blockchain.<\/p>\n

According to CryptoQuant contributor, theKriptolik<\/a>, ETH price trading below this metric, which is historically a bearish sign. When the realized price is above the spot price, it usually acts as resistance and places \u201cmost holders suddenly in a loss position,\u201d the analyst said.<\/p>\n

The analyst added:<\/p>\n

\u201cDrops below the realized price often mark the capitulation phase, where investors lose confidence and begin selling en masse.\u201d<\/p><\/blockquote>\n

\"3
\n

Ethereum realized price for accumulation addresses. Source: CryptoQuant<\/em><\/p>\n<\/figcaption><\/figure>\n

In June 2022, Ether\u2019s realized price fell below the spot price, preceding a 51% drop in ETH price following the Terra Luna market crash<\/a>. A similar scenario was witnessed in November 2022, when the metric fell below the price before Ether dropped 35% following the FTX collapse<\/a>.\u00a0<\/p>\n

Now that a similar scenario is playing out, the current setup loosely echoes those prior bearish continuation phases, with ETH price at risk of a deeper correction.\u00a0<\/p>\n

Spot Ethereum ETF flows remain weak<\/h2>\n

Spot Ethereum ETFs<\/a> continue to weaken, with more than $3.3 million in net outflows on April 8. In fact, these investment products have recorded $94.1 million in outflows over the last two weeks against $13 million in inflows.<\/p>\n

The lack of investor interest is concerning, especially since institutional demand was considered a key part of Ether\u2019s appeal and played a role in the gains accrued in May 2024 as investors bet on an ETF approval from the US Securities and Exchange Commission.<\/p>\n

\"3
\n

Spot Ether ETF flows table. Source: Farside Investors<\/em><\/p>\n<\/figcaption><\/figure>\n

This is also reflected across all other Ether products, with the report from CoinShares pointing out<\/a> that flows into Ethereum investment funds align with the bearishness seen across the market, with $37.4 million outflows recorded during the week ending April 4.<\/p>\n

ETH open interest is low, and funding rates are negative<\/strong><\/h2>\n

Another factor weighing Ether\u2019s price down is the lack of enthusiasm in its derivatives market, evidenced by low open interest and negative funding rates.\u00a0<\/p>\n

Open interest<\/a> (OI)\u2014the total number of outstanding futures and options contracts\u2014remains low, indicating reduced trader participation and speculative activity. Currently, at $16.7 billion, the metric is 48% below its peak of $32.3 billion witnessed on Jan. 24.<\/p>\n

Declining OI signals waning investor confidence or interest, which can exacerbate the price decline as buying pressure dries up.<\/p>\n

\"3
\n

ETH open interest across all exchanges. Source: CoinGlass<\/em><\/p>\n<\/figcaption><\/figure>\n

Compounding this issue are negative funding rates in Ether\u2019s perpetual futures markets, which are hovering below 0%, indicating that bearish sentiment dominates the market.<\/p>\n

Related: <\/strong><\/em>Ethereum whale sells ETH after 900 days, missing $27M possible peak profit<\/strong><\/em><\/a>
When rates turn negative, it means shorts (bets against the price) are paying longs to keep their positions open, suggesting a dominance of bearish sentiment.\u00a0<\/p>\n

\"3
\n

ETH funding rates across all exchanges. Source: Glassnode<\/em><\/p>\n<\/figcaption><\/figure>\n

Competing layer-1 blockchains outpace Ethereum network activity<\/strong><\/h2>\n

Ethereum\u2019s high gas fees offer an opportunity for competing layer-1 blockchains<\/a> focusing on high scalability to eat into its market share in the space. While a fraction of the activity has moved to Ethereum layer-2 solutions, some users and developers opt for other top layer-1 alternatives such as the BNB Chain<\/a>, Solana, Avalanche and Tron<\/a>.<\/p>\n

As a result, Ethereum\u2019s network activity growth has fallen behind that of its rivals.\u00a0<\/p>\n

\"3
\n

Top blockchains ranked by 24-hour DApps volume, USD. Source: DappRadar<\/em><\/p>\n<\/figcaption><\/figure>\n

Ethereum\u2019s unique active wallets (UAW) \u2014 addresses engaging with decentralized applications (DApps) on the platform \u2014 declined by over 33% over the last 30 days compared to just a 16% decrease on Solana<\/a> and a 16% increase on Tron.<\/p>\n

Similarly, the total number of transactions deployed on the Ethereum network dropped by 40.5% during the same period, while transactions on the BNB Chain, Solana and Avalanche decreased by 16%, 30% and 23%, respectively. Transactions on Tron and Fantom increased by 23% and 16%.<\/p>\n

There\u2019s no indication that the factors weighing on Ether\u2019s price \u2014 such as declining network activity and low demand for its spot ETF products \u2014 will reverse anytime soon.\u00a0<\/p>\n

While this doesn\u2019t guarantee that Ether\u2019s price will remain in an extended downtrend, the technical setup suggests that ETH’s price may bottom at $1,000<\/a>.<\/p>\n

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/p>\n