Ethereum Price Warning: Death Cross Nearing on the Weekly Chart

Key Insights

• Ethereum price has formed a death cross on the weekly chart.
• This pattern is one of the riskiest ones in the market.
• ETH faces some major risks, including the falling TVL and network fees.

Ethereum price has crashed this year. This trend may continue in the near term as a death cross pattern on the weekly chart nears. ETH token has plunged to $1,765 today, down sharply from last year’s high of $4,950.

Ethereum Price is Nearing a Death Cross on the Weekly Chart

ETH price has slumped in the past few months, moving from a high of $4,950 to the current $1,765. This retreat may continue in the near term as the death cross pattern nears on the weekly chart.

The spread between the 50-week and 200-week moving averages has narrowed in the past few months. The 50-week EMA has moved to $2,532, while the 200-week EMA stands at $2,507.

At the same time, the coin has remained below the Supertrend indicator. It is attempting to drop below the 78.3% Fibonacci Retracement level. Ethereum price has moved slightly below the key support of $1,763. It’s the lower side of the double-bottom pattern whose neckline is at $2,460.

Therefore, the coin will likely continue falling, potentially to the psychological level of $1,500. If this happens, the next psychological level to watch will be at $1,000. On the other hand, a rebound above the crucial resistance level at $2,460 will invalidate the bearish outlook.

Ethereum May Retreat as Fed Hints at Rate Hikes

One of the main risks facing Ethereum is that the Federal Reserve has hinted that it will hike interest rates this year. In a statement on Wednesday last week, the Fed decided to leave interest rates unchanged between 3.50% and 3.75%.

The most important part of the meeting was the dot plot. This showed that nine officials expect the bank to hike interest rates later this year. Goldman Sachs analysts expect the bank to deliver two hikes. That will push the benchmark rate between 4% and 4.25%.

The bank is considering hiking interest rates because of the ongoing inflation surge. Recent data showed that the headline inflation rate jumped to 4.2% in May.

Inflation may have peaked since crude oil prices have continued falling this week. Brent, the global benchmark, dropped to $79. The West Texas Intermediate (WTI) has dropped to $75. Still, the main issue is that inflation has remained much higher than 2% for over five years.

Ethereum Network Activity Has Faded

The other major risk is that Ethereum’s network activity continues to wane amid the ongoing crypto winter. Data shows that the TVL in its DeFi ecosystem has dropped to $37 billion from a record high of $95 billion.

The same trend is happening in the non-fungible token (NFT) industry, which has largely died. As a result, Ethereum is no longer making as much money as it did in the past. Indeed, data shows that ETH has made less than $90 million this year, its worst performance in years.

These metrics, and the broader crypto winter likely explain why demand from investors has waned. Data shows that spot Ethereum ETFs have had just one month of inflows this year.

They have had a net outflow of over $1 billion. Only Bitcoin ETFs have lost more money. Also, the futures open interest has continued falling this year.

Notably, there are signs that Hyperliquid is overtaking Ethereum in major metrics. For example, it has made over $900 million in fees in the past 12 months. Its volume in the futures trading industry is higher than that of all DEX protocols on Ethereum.

Ethereum has also been overtaken by other smaller platforms like Lighter and Aster in the trading industry.

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