With Ethereum’s market dominance approaching historic lows, nerves are starting to creep into the investor base as Ethereum’s price heads back towards testing the $1,100 support level. The second-largest cryptocurrency by market capitalization is struggling not only with a growing competitive threat, but with a highly bearish technical outlook. This perfect storm of factors portends a tough stretch ahead for Ether.

Declining Market Dominance

Ethereum’s current market dominance is 51.7% down from 61.2% in February of 2024. This figure is an all-time low since 2019-2020, marking a monumental change in tone across the cryptocurrency space.

Ethereum’s loss of dominance has happened alongside the rise of its competitors. XRP, perhaps even more so than EOS, has exploded as ETH’s most serious competitor in terms of market capitalization. Over this time frame, XRP’s dominance has increased dramatically by more than 200%. In the same fashion, Solana recently enjoyed a 172% rise in dominance by Total Value Locked (TVL).

"Ethereum dominance is so very close to registering new all-time lows" - Rekt Capital

This is an impressive accomplishment, given the market dominance has fallen below the 50 threshold. Furthermore, the RSI is still below the level of 50, confirming that the trend still favors the downside.

Bear Flag Pattern Emerges

Ethereum’s price action has been super interesting over the last three weeks. As it does so, it’s beginning to form an inverse bear flag pattern on the daily ETH/USD chart. This top heavy technical formation would imply a further continuation of the current downtrend.

As per a potential bear flag pattern on ETH’s daily chart, the cryptocurrency risks a major price drop. The flagpole's height sets the target, potentially pushing Ether's price down to $1,100, a 33% drop from the current price.

A daily candlestick close below the flag’s lower boundary of $1,600 would break this pattern. This would indicate the beginning of an important short-term bearish move.

Potential Price Bottom

On balance, ETH’s price likely bottoms in the low $1,000s at key support. This projection takes into account the fact that there are bearish technical indicators and the growing competition from other cryptocurrencies.

The $1,000 level is a key support area that may offer some respite for Ether bulls. Nonetheless, a close under this mark would open the door for increased price drops.