Could Ethereum Be Entering a Death Spiral? ETH Risks Critical 5-year Support

Speculators fear the leading altcoin could face a death spiral as its month-long decline threatens a support level that has marked Ethereum bottoms since 2020.

As the bull market matures, economic concerns—Trump’s “tariff war,” NATO tensions, and recession fears—have taken center stage, dragging ETH down 24% this month.

Retail liquidity has dried up under heavy market FUD, and panic selling is running rampant—half of holders now face unrealized losses, according to IntoTheBlock data.

Could Ethereum Lose its Claim to the Altcoin Throne?

Investment bank Standard Chartered has slashed its end-of-year Ethereum forecast by 60% to $4,000, raising questions about its standing in the “best crypto to buy” conversation.

JUST IN: Standard Chartered Bank cuts $ETH year-end price target by 60% from $10,000 to $4,000.

— Watcher.Guru (@WatcherGuru) March 17, 2025

The bank attributes much of Ethereum’s decline to the rapid expansion of Layer 2 solutions like Base.

While initially intended to improve the Ethereum network’s scalability, they have inadvertently diluted demand for ETH itself.

Standard Chartered estimates that the adoption of L2 networks has shaved off $50 billion from Ethereum’s market capitalization—a trend expected to continue.

ETH Price Analysis: 5-Year Support Under Threat

Ethereum is at risk of losing a critical 5-year support level that has defined its price moves since 2020.

This lower bound of a symmetrical triangle pattern is a pivotal level—a breakdown could send Ethereum plunging as low as $1,050, marking a potential 45% decline from current prices.

However, today’s growth offers a glimmer of hope, with technical indicators hinting at a potential bounce.

The Relative Strength Index (RSI) has made a U-turn after hitting the oversold threshold at 30, a sign that selling pressure may be exhausted.

If buying pressure persists, Ethereum could climb to retest the upper resistance at $3,500, representing an 80% gain from current levels.

That said, against the current bearish market backdrop, this bullish scenario is questionable.

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