Ether (ETH) is currently exhibiting a 'bear pennant' pattern on its daily chart, a technical formation often linked with downward momentum. According to Cointelegraph, this setup, combined with a decrease in total value locked (TVL), could indicate a continuation of ETH's correction towards $1,800.
The cryptocurrency has experienced a 13% decline from its multi-month highs above $2,400, breaking a significant trend line that had supported its price since early February. A video posted by Chain Mind on X highlighted the potential for ETH/USD to drop further after falling below this ascending trend line. Chain Mind emphasized the importance of reclaiming the support level to avoid a decline to below $1,800.
The bear pennant pattern, characterized by price consolidation between two converging lines following a sharp drop, suggests that a break below the lower trend line at $2,060 could lead to a further decline. This would set a target for ETH/USD at $1,800, representing a 14% decrease from its current price. Crypto analyst Alex Marzell noted that a drop below $2,050 would increase the likelihood of ETH moving towards the next support zone at $1,800.
In addition to the bearish technical outlook, Ether faces several challenges, including recent departures from the Ethereum Foundation, weakening social media sentiment, and a significant decline in TVL across its DeFi protocols. Ethereum's TVL has decreased to $116 billion, a level last seen in April 2025, marking a 55% drop from its all-time high of $258 billion in August 2025.
The decline in TVL is particularly pronounced in Ethereum's layer-2 (L2) networks, with Ether.fi experiencing a 32% drop over the past 30 days. According to CryptoRank, Arbitrum, zkSync, and Linea have seen the sharpest corrections, with declines of 63%, 64%, and 98%, respectively. This trend highlights the liquidity sensitivity to incentive programs and short-term reward mechanics, undermining the 'unified liquidity pool' effect envisioned by early L2 development models.
The ongoing decrease in TVL indicates weakening on-chain demand, which adds downward pressure on ETH and raises the risk of further price declines in the near term.
Anais