Ethereum's Value Plummets 50% Amid Weakening Fundamentals, Market Uncertainty

Matrixport, a prominent digital asset financial services platform, has released its daily chart analysis, highlighting the significant decline in Ethereum's value. Since reaching a peak of $3,668 on January 7, 2025, Ethereum has experienced a cumulative drop of 50%. This decline is accompanied by a notable slowdown in on-chain activity across the entire Ethereum ecosystem. The weakening fundamentals and sustained low demand for ETH have contributed to a bearish market sentiment.

The derivatives market has begun to factor in a significant 10% volatility for the upcoming week, indicating heightened uncertainty. This volatility is expected to impact the market in either direction, reflecting the current state of market sentiment. Additionally, the Ethereum price is gradually approaching the lows observed during the FTX collapse, further exacerbating the bearish outlook. FTX is anticipated to commence repayments to major creditors starting on May 30, 2025, which could introduce additional market dynamics.

Several key risk events are looming, adding to the overall market uncertainty. The combination of these factors—weakening fundamentals, low demand, and impending risk events—has created a challenging environment for Ethereum. The market's bearish sentiment is further reinforced by the derivatives market's pricing in of significant volatility, suggesting that investors are bracing for potential price swings.

As the Ethereum price nears the lows seen during the FTX flash crash era, the market's focus will likely shift towards the upcoming repayment schedule by FTX. This event could either alleviate some of the market's concerns or introduce new uncertainties, depending on how the repayments are executed. Investors and analysts will be closely monitoring these developments to gauge their impact on Ethereum's price and the broader market sentiment.