Ethereum (ETH) has continued to lag behind the broader crypto market, with its price falling below the crucial $1,500 support level. Technical indicators, weak ETF demand, and diminishing network activity suggest that a deeper correction may be on the horizon for the second-largest cryptocurrency.
1. Ethereum Falls Below Realized Price — A Bearish On-Chain Signal
Ethereum’s price has slipped beneath its realized price — an on-chain metric that reflects the average price at which ETH coins were last moved. Historically, trading below this level marks periods of investor capitulation, as it signals that most holders are now underwater.
According to CryptoQuant analyst theKriptolik, when ETH trades under its realized price, it often triggers mass sell-offs. This happened in June 2022, leading to a 51% drop after the Terra Luna collapse, and again in November 2022 before ETH tumbled 35% following FTX’s bankruptcy. The current setup shows similar bearish momentum building.
2. Weak Spot Ethereum ETF Flows Reflect Fading Institutional Interest
Investor sentiment toward Ethereum is also being hurt by declining interest in spot Ethereum ETFs. Data from April 8 shows net outflows of $3.3 million, adding to the $94.1 million pulled from Ethereum-focused funds over the past two weeks.
CoinShares also reported $37.4 million in outflows from Ethereum investment products in the week ending April 4. This downturn marks a significant reversal from earlier optimism tied to a potential SEC approval of Ether ETFs, which helped drive price gains in mid-2024.
3. Low Open Interest and Network Activity Compound the Sell-Off
Ethereum’s derivatives market is showing signs of exhaustion. Open interest in ETH futures has dropped to $16.7 billion—down 48% from its January peak of $32.3 billion. At the same time, negative funding rates suggest that short positions are dominating, indicating bearish sentiment across exchanges.
Meanwhile, Ethereum is losing market share to rival Layer-1 blockchains like Solana, Tron, and BNB Chain. Over the past 30 days:
Ethereum’s unique active wallets (UAW) fell 33%
Transaction volume dropped 40.5%
In contrast, Tron saw a 23% rise in transactions and 16% increase in UAW.
The combination of high gas fees, lower developer activity, and shrinking user engagement is weakening Ethereum’s competitive edge in the smart contract ecosystem.
Could Ethereum Fall to $1,000?
With weak ETF demand, negative on-chain signals, and declining network activity, Ethereum’s price could face further downside. Some analysts suggest a potential bottom near $1,000 if current trends persist. Until key indicators like ETF inflows and network usage rebound, a strong ETH recovery remains unlikely, according to Cointelegraph.
