Ethereum is currently trading at approximately $1,954, experiencing a period of consolidation as it approaches a critical apex of a symmetrical triangle pattern. This situation unfolds against a backdrop of rising open interest, which has increased by 0.86% to reach $26.10 billion. A warning from Bitwise analyst Max Shannon suggests that Ethereum could be at risk of a 22% decline, potentially plummeting to $1,500. Such a drop would mark a significant downturn and could signal the worst streak for the cryptocurrency since late 2018.
Shannon”s caution highlights Ethereum”s current position, which is roughly 55% lower than its peak in December, where it surpassed $4,300. If Ethereum continues to decline throughout March, it may mirror the seven-month slump experienced between May and November of 2018, where the asset saw a staggering 94% drop from peak to trough. A fall to $1,500 would indicate a 23% decrease from the current price and place Ethereum just above the February low of $1,588.
Complicating the narrative surrounding Ethereum”s staking dynamics, analysts have disputed claims made by Santiment that over 50% of all issued Ethereum is currently staked. Luke Nolan, a senior research associate at CoinShares, described these assertions as “inaccurate, or at least materially misleading.” Nolan clarified that while approximately 80 million ETH has passed through the staking contract historically, only about 37 million ETH—representing roughly 31% of the current supply—is actively staked at this time.
The staking contract”s balance reflects cumulative deposits since its launch, but it does not account for withdrawals, which have been enabled since the Shanghai upgrade earlier this year. This upgrade allows validators to exit the contract and reintroduce ETH back into circulation. Further validation comes from Aleksandr Vat of Ethplorer.io, who confirmed that active staking metrics show 37,253,430 ETH currently staked, which is about 30.8% of the total supply.
The importance of accurately presenting staking levels cannot be overstated, as misrepresentations can lead to misconceptions about supply dynamics. Despite the clarifications, Ethereum”s staking participation remains significant, particularly with a recent increase in validator growth driven by larger entities such as Bitmine and U.S.-listed ETFs.
As the symmetrical triangle pattern continues to tighten, Ethereum”s open interest has risen, while trading volume has decreased by 6.94% to $39.99 billion. Notably, options volume surged by 16.33% to $1.06 billion, with options open interest growing by 3.17% to $7.11 billion. This shift indicates that traders are preparing for a significant market move, although the long/short ratios suggest a preference for long positions on platforms like Binance and OKX.
The current technical setup shows Ethereum trapped between resistance at approximately $2,050 and support at $1,900. The parabolic SAR is positioned at $1,995, just above the existing price. Major moving averages remain overhead, with the 20-day EMA at $1,966, the 50-day at $1,997, the 100-day at $2,105, and the 200-day at $2,342. The triangle pattern has been compressing since mid-February, with previous breakout attempts failing at progressively lower highs.
As the apex of the triangle approaches, Ethereum is at a critical juncture where a breakout above $2,050 could see it targeting $2,105, while a breakdown below $1,900 could lead to a retest of support levels around $1,800 and potentially the February low of $1,588. A decisive close below $1,900 would bring Shannon”s $1,500 target into play.
In conclusion, Ethereum”s immediate future hinges on its ability to maintain $1,900 support or break through $2,050 resistance. The market is poised for volatility as traders monitor these critical levels closely.
