Ethereum’s Descent into Madness: 91% Crash Imminent?

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Oh, dear Ethereum, how the mighty have fallen! 🤦‍♂️ The second-largest cryptocurrency by market capitalization is facing a spot of bother. According to CryptoQuant’s EgyHash, Ethereum’s network activity has been slowing down, leaving it in a precarious position. Its performance has dropped to levels not seen since 2020, and one can’t help but wonder if it’s on the brink of a 91% crash. 🚨

The Network Activity Conundrum

As EgyHash so aptly puts it, Ethereum’s troubles are largely due to declining network activity. The number of active addresses has been dwindling since the start of the year, leading to lower transaction fees. And, darling, lower transaction fees are the kiss of death for Ethereum’s overall value. 💀

According to on-chain data, both the average fee per transaction and block have hit all-time lows. This decline has made Ethereum less lucrative for validators, further affecting its ecosystem. It’s a bit like a dinner party where no one wants to pay the bill. 🍴

And if that weren’t enough, Santiment data reveals that Ethereum whales have dumped 760,000 ETH, worth a staggering $1.42 billion, in just two weeks. Whale activity has also plummeted by 63.8% in the last five weeks, signaling major trouble. If this trend continues, Ethereum could face a massive sell-off and more price pain ahead. 🚫

The Dencun Upgrade: A Recipe for Disaster

Ethereum’s deflationary mechanism, which burns transaction fees to control inflation, has weakened due to low network activity. Since the Dencun upgrade, the burn rate has hit its lowest level since Ethereum transitioned to proof-of-stake, increasing supply and adding inflationary pressure. It’s a bit like trying to put out a fire with gasoline. 🚒

According to EgyHash, this situation is making it difficult for Ethereum to maintain its value. For a recovery, network activity and transaction fees must rise. However, if inflation continues to exceed demand, Ethereum’s price could remain under pressure. It’s a bit like trying to hold water in a sieve. 🌊

The 91% Crash Warning: A Dire Forecast

Adding to the bearish concerns, crypto analyst Ali Martinez has warned of a potential Ethereum crash against Bitcoin. As per Martinez, Ethereum could crash by 91% based on the ETH/BTC chart. It’s a bit like a double-edged sword – if this pattern plays out, ETH/BTC could tumble to 0.0020 BTC. 🤯

From this angle, the $ETH / $BTC trading pair could be heading to 0.0020!

— Ali (@ali_charts) April 2, 2025

He points out that when flipped upside down, the chart shows a double-top pattern—a classic bearish signal that often leads to a sharp fall. “If this pattern plays out, ETH/BTC could tumble to 0.0020 BTC,”. Currently, Ethereum is trading at 0.02153 BTC ($1,766), meaning such a drop would be a devastating crash for the asset. 🚨

Meanwhile, technical analysis suggests that if Ethereum holds above the $1,800 support level and begins a recovery, similar to Bitcoin, it could push past the $1,900 and $1,950 resistance zones. But, darling, that’s a big if. 🤞

FAQs

Why is Ethereum’s price down today?

ETH’s price is dropping due to low network activity, reduced transaction fees, whale sell-offs, and inflationary pressure from the Dencun upgrade. It’s a bit like a perfect storm. ⛈️

How has the Dencun upgrade affected Ethereum?

Dencun lowered Ethereum’s burn rate, increasing supply and inflationary pressure, which could further weaken ETH’s price stability. It’s a bit like trying to put a square peg in a round hole. 🤯

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2025-04-03 16:38