ETH Price Crash: Will It Recover or Keep Falling?

Ethereum has always been named Bitcoin’s biggest competitor, but since February, it has lost momentum and experienced many downfalls. This decline made investors analyse the reasons behind the ETH price drop.

A recent Bloomberg article calls this Ethereum’s most difficult period as it heads towards its second decade. Developers are jumping ship, early adopters are disappointed, and ETH’s market performance has been dismal. 

The previous ETH market cap was noted as $221 billion, but now it has dropped to $218.62 billion. It hit $3,600 in January 2025 but declined to $1,800, signifying a major drop in the first quarter of the year. Hence, market observers calculated the 47% losses, reducing its market dominance from 17% to 7.9%

Competition is Catching Up

As Ethereum struggles, other cryptocurrencies are growing. The number of developers working on Ethereum projects fell by 17% in 2024, while Solana (SOL) saw a surge in activity. Solana has also emerged as a top destination for memecoins, with its network growing 83% year on year.

Other cryptocurrencies like Ripple’s XRP have also surpassed Ethereum. While ETH went down last year, XRP gained 249% and increased its market capitalization from $30 billion to $127 billion.

This poor performance has made Ethereum less attractive to investors. The Sharpe ratio, which measures risk-adjusted returns, has dropped to -0.69. This means ETH not only offers lower returns but has also become a riskier investment compared to other assets.

Is Leadership the Problem?

Some experts believe that Ethereum’s leadership is a key factor in its struggles. Crypto analyst Ryan Watkins pointed out that Ethereum has failed to keep up with its competitors. He stated, “It’s all about growth and leadership. If Ethereum had kept pace or outperformed its peers, none of these issues would matter.”

Bloomberg’s analysis also criticized Ethereum’s co-founder, Vitalik Buterin, for not adapting to the changing crypto ecosystem. As other blockchain networks engage governments and regulators to push adoption, Ethereum only concentrates on decentralization. 

Buterin has refused to become engaged in political lobbying or assist policymakers, holding the view that crypto must be independent. Though this position is loyal to Ethereum’s founding ideals, it has left the platform isolated as competitors build stronger industry ties.

Ethereum’s Future

Ethereum is still under strong selling pressure. At the time of writing, ETH is trading at $1,812, down 1.72% in the past 24 hours. Over the past week, it has dropped 11.3%, signaling continued negative sentiment.

Technical indicators indicate the downtrend may continue. The Stochastic RSI, the price momentum measure, crossed into bearish territory in the recent past and has dropped to 14.6, showing strong downward momentum. If the current market condition continues, ETH may reach $1,761.

For Ethereum to regain investors’ confidence, it has to get above the $2,000 level and stay above it. Until then, its troubles could continue as investors look to better-performing alternatives.