Synopsis: This article is about the downfall of Ether by 31% in the past month. It also mentions the reasons for such a downfall in the price.
Ether (ETH) recently dropped below $2,000 and has lost about 31% of its value in the past month. The fall is partly linked to the negative market mood after geopolitical tensions involving the United States, Israel, and Iran, which made investors more cautious about risky assets like cryptocurrencies. Several indicators now suggest the price could fall further before it starts to recover.
One key signal is that Ether is trading below something called its “realised price.” This is an average price based on the last price movement on the blockchain. Right now, the market price (around $1,988) is much lower than the average cost of about $2,430 that many investors paid.
When this happens, it means many holders are losing money on paper. In the past, this situation often led to more selling because investors panicked and tried to cut losses. It can also turn the realised price into a level that the market struggles to move back above.
Price decrease in the past
History shows this has happened before big drops. In 2022, Ether fell below its realised price after the Terra-Luna crash and then dropped about 45% more. A similar situation occurred in 2018 before a major decline. Because the current setup looks similar, some analysts think Ether could still fall before finding a stable bottom.
Technical charts also suggest weakness. Analysts look at long-term trend lines called moving averages to understand market direction. In previous bear markets, Ether only reached a true bottom when the 50-week average moved below the 100-week average. That crossover has not happened yet. The two lines are very close now, which means the price might still move lower before the market stabilises.
Short-term chart patterns also look bearish. Traders noticed a pattern called a “bear flag,” which usually appears during a downtrend and often leads to another drop. Some traders believe Ether could fall to around $1,750–$1,850 if this pattern continues. In more negative scenarios, some estimates suggest the price might even approach $1,400 if demand keeps weakening.
Also Read: Why institutions still prefer Ethereum despite faster blockchains
Sign of selling pressure
Another sign of selling pressure comes from a measure called the Coinbase Premium Index. This compares Ether’s price on Coinbase with its price on Binance. Recently, the index turned strongly negative. This means Ether is cheaper on Coinbase, which suggests many U.S. traders are selling. The last time the index was this negative was during the 2022 crypto bear market.
When the premium stays negative for a while, it often means the market is going through a “capitulation phase.” This is when investors lose confidence and sell large amounts of their holdings. Such periods can push prices lower before the market eventually stabilises.
Institutional investors also seem to be pulling money from Ether-related investments. U.S. spot Ethereum exchange-traded funds have seen money leave for seven weeks in a row. In total, investors withdrew nearly $392 million during this time. Last week alone, about $92.5 million left these funds. This shows that not only retail traders but also larger investors are reducing their exposure to Ether.
Conclusion
On a global level, Ethereum investment products also saw outflows, adding more pressure on the price. When both retail and institutional investors are selling at the same time, it usually makes it harder for the market to recover quickly.
Overall, several signals point to continued weakness in Ether’s price: it is trading below its realised price, technical indicators still look bearish, U.S. traders appear to be selling heavily, and institutions are pulling money out. Because of this combination, analysts think Ether may fall further before it eventually finds a bottom and begins a recovery.
Written by Parvati Anilkumar
