Ethereum Faces 40% Drop Risk as Death Cross Forms

Ethereum’s native token, Ether (ETH), has recently experienced a significant technical event known as a “death cross” on its two-week chart. This occurrence marks the first time since the 2022 bear market that such a crossover has been observed. Historically, a death cross has been linked to a substantial price decline, with previous instances preceding a roughly 40% drop in ETH’s value.

The bearish crossover happened as ETH’s 20-period exponential moving average (20-2W EMA) slipped below its 50-period EMA. This technical pattern closely resembles the setup from mid-2022, which was followed by a 40% decline in Ether’s price. The lead-up to the current death cross involved a strong local top, a prolonged consolidation phase, and a gradual breakdown marked by lower highs. In both past and present scenarios, Ethereum first closed below its 20-period EMA, then slid beneath the 50 EMA, forming a local bottom before testing these levels as resistance multiple times.

As of June 2025, ETH has been struggling to break above the 20- and 50-period EMAs despite repeated attempts. Continued rejection at these moving averages keeps downside risks elevated, with potential declines toward $1,835—a Fibonacci level from the 2021-2022 era—as the next price floor. A decisive retaking of the 20-period and 50-period EMAs as support could increase ETH’s potential to rally toward the $3,500-4,000 price range, aligning with Fibonacci targets.

Supporting this possibility, ETH’s price rise since May has been accompanied by its strongest volume since July–August 2022, during the last bear market recovery phase. Additionally, Ether funds have witnessed their strongest inflows since 2021 in recent weeks, netting $2.43 billion so far in 2025 and managing $14.29 billion in assets overall. The uptick in trading activity indicates renewed interest from retail and institutional participants, but the momentum appears to extend beyond mere speculation.

On June 24, the Ethereum network processed 1.45 million successful transactions, its highest daily count since January 2024. This surge points to increased utility demand from decentralized applications (DApps), decentralized finance (DeFi) protocols, layer-2 interactions, and staking participation, all of which strengthen Ethereum’s network value. This could lay the groundwork for a sustained recovery, aligning with both fractal and volume-based signals, if the trend persists.