Ethereum’s market dominance is still under immense pressure, reaching lows not seen since 2019-2020. With its share of the market shrinking fast, the price of ETH is in danger of a significant decline to as low as $1,100. Recent weeks’ decline has been blamed on various factors, from growing competition from rival cryptocurrencies to bearish looking technicals.
The changing market landscape paints a tough road ahead for Ethereum. Its dominance approaching all-time lows are just one of the many signs that things are changing when it comes to investor preference and market dynamics. This article takes a look at what’s causing Ethereum’s waning market share and what it might mean for the price going forward.
Diminishing Market Dominance
Ethereum’s market dominance has fallen to 51.7%, a significant drop from 61.2% in February 2024. This minor contraction is indicative of a larger trend of altcoins continuing to separate from the pack and gaining more market share away from Bitcoin.
XRP, the next closest competitor to Ethereum in market capitalization, has skyrocketed into dominance up more than 200%. All this remarkable chicken expansion happened at the same time. Solana’s share of Total Value Locked -TVL has increased by 172%. This remarkable expansion further highlights the competitive pressures that Ethereum is experiencing.
"Ethereum dominance is so very close to registering new all-time lows" - Rekt Capital
Technical Indicators Point to Downside Risk
The relative strength index (RSI) for Ethereum remains under the 50 level. This indicates that the prevailing trend in the market is down and likely to remain down. This key technical indicator adds more weight to the bearish sentiment that currently surrounds Ethereum’s near-term prospects.
Adding to the worries, a bearish flag pattern has been developing on Ethereum’s daily chart. The flagpole’s height in this formation suggests a minimum price target of $1,100. This would be a 33% reduction from current price levels.
A breakout confirmed below the flag’s lower boundary at $1,600 would trigger a steep drop-off. This takes place in case a daily candlestick closes under this stage. Ethereum’s price action during the last three weeks has directly contributed to the formation of this bearish pattern.
Potential Price Bottom
Considering all these factors and further technical analysis, this would mean $ETH will likely bottom out at $1,000 in the long term. This projection takes into account the perfect storm of bearish factors and the growing rivalry from alternative altcoins.
If the price drop persists as expected, buyers need to be ready for major support levels starting at the $1,000 price level. Keeping a close eye on market trends and technical indicators will be instrumental in capitalizing on this time of uncertainty.
