Ethereum Drops 30% in Months as Death Cross Forms

Ethereum's price has experienced a significant decline, with a drop of over 30% in a matter of months the last time its two-week chart formed a death cross. Currently, the Ethereum price has risen slightly to $2,447, but the overall crypto market has lost 3% in the past 24 hours. Ongoing instability in the Middle East and the rejection of a final settlement between the SEC and Ripple by Judge Torres have contributed to the market's shaky foundation. Ethereum remains down by 2% in a week and by 8% in a month, with its two-week chart forming a very bearish death cross that could indicate further losses.

Looking at ETH’s two-week chart, its 20-period average has just dropped below the 50-period average, following the coin’s declines since the start of the year. The last time these two averages formed a death cross was in September 2022, when the Ethereum price went from around $1,750 to $1,150 by December. This is a 34% decline, implying that we may be about to see a similarly steep drop in the coming weeks and months. There are other parallels with the second half of 2022, such as the fact that Ethereum’s moving average convergence divergence has recently turned negative. After turning negative in the middle of 2022, it remained below the baseline for more or less a year, as ETH struggled to regain the highs it had enjoyed in late 2021.

While past patterns are no guarantee of the future, it’s possible to argue that circumstances are different this time, with a pro-crypto White House. However, with the situation tense in the Middle East, the crypto market could encounter shocks that drag down the Ethereum price. On a more positive note, a death cross on ETH’s two-week chart could also be the beginning of a consolidating period which eventually results in new growth. Ethereum remains the biggest layer-one network in terms of total value locked, positioning it well to grow again once conditions are more favorable. Based on this, we can expect that, after dipping in the coming weeks, the Ethereum price will return to $3,000 by Q4, and to $3,500 by the end of the year.