Ethereum (ETH) has seen significant price declines, dipping below $1,600 as it loses market share to competing Layer-1 blockchains like Solana and Avalanche. As the cryptocurrency faces increasing competition and regulatory concerns, traders are eyeing further downside risks, with some predicting a potential drop to as low as $1,100.
ETH’s total value locked (TVL) has plunged by over $12 billion in just six weeks, indicating weakening user demand and capital outflows. The network’s share of the DeFi ecosystem has slipped below 55%, a stark contrast to the 70% dominance it held at its peak.
Ethereum’s struggles are further compounded by the recent downturn in its ETH/BTC trading pair, which has fallen below the key 0.02 threshold. The decline in this pair suggests a shift in investor sentiment toward Bitcoin, as it continues to outperform Ethereum in terms of market dominance, now holding over 54% of the market share.
Despite the successful rollout of the Dencun upgrade in March 2025, Ethereum’s on-chain activity has not seen a significant rebound. Gas fees have stabilized at lower levels, but this has not translated into increased demand, with daily active addresses and transaction volumes remaining flat. Meanwhile, Ethereum’s Layer-2 solutions, such as Arbitrum and Optimism, are absorbing increasing transaction volumes, further diverting activity away from the main Ethereum network.
Ethereum’s bearish outlook is reflected in its technical indicators. The RSI suggests ETH is approaching oversold territory, but the short-term outlook remains uncertain. If Ethereum fails to reclaim the $1,730 level and stabilize its on-chain metrics, the $1,100 target could become a more likely scenario.
In the coming days, traders will be watching key support levels closely. While Ethereum’s long-term prospects remain positive, its near-term vulnerability suggests that further downside is possible unless the price rebounds quickly. Failure to hold the $1,597 level could confirm the bearish prediction, while a break above $1,730 may signal a potential reversal.
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