Ethereum's Ether Drops 65% in Three Months, Mirroring 2018 and 2022 Bearish Patterns

Ethereum's native token, Ether (ETH), has experienced a significant decline of 65% over the past three months, raising questions among investors about whether the market has reached its bottom. The current price action of ETH mirrors a familiar fractal pattern observed in 2018 and 2022, where euphoric rallies were followed by sharp breakdowns and prolonged bear markets.

These cycles shared several key traits, including higher price highs accompanied by lower highs in the relative strength index (RSI), indicating bearish divergence and weakening momentum. After reaching a price peak, ETH typically retraced heavily, often falling through key Fibonacci levels. Cycle bottoms usually formed once the RSI dipped into oversold territory, with the price stabilizing near historical Fibonacci zones.

In December 2024, Ether formed a higher high near $4,095, while the RSI made a lower high, mirroring the bearish divergence seen in previous tops. This divergence marked the beginning of a sharp correction. Currently, ETH’s price has closed below the 1.0 Fibonacci retracement level at around $1,550. The weekly RSI is still above the oversold threshold of 30, suggesting room for further declines until the reading drops below 30.

The fractal suggests Ethereum could be in the final leg of its decline, with the next potential price targets inside the $990 - $1,240 price range, aligning with the 0.618-0.786 Fibonacci retracement area. This aligns with the historical pattern where ETH's price stabilizes near key Fibonacci support levels.

Additionally, Ethereum’s Net Unrealized Profit/Loss (NUPL) has entered the “capitulation” zone, an onchain phase where most investors are holding ETH at a loss. In previous cycles, similar moves into this zone occurred close to major market bottoms. For instance, in March 2020, the nupl turned negative just before ETH rebounded sharply following the COVID-19 market crash. A similar pattern emerged in June 2022, when the metric fell into capitulation territory shortly before Ethereum established a bear market low of around $880.

With ETH once again entering this zone, the current setup loosely echoes those prior bottoming phases, coinciding with key Fibonacci support levels near $1,000. This suggests that $1,000 could be the final bottom for ETH, aligning with the historical patterns and onchain indicators.