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Ethereum, as the native token of Ethereum, is showing signs of bullish fatigue after a sharp 65% decline over the past three months. The speed of the downtrend and the oversold conditions indicated by several Ethereum price metrics have led investors to question whether the market bottom is approaching.

Ethereum Fractal Suggests Drop to $1,000

The current price action of Ethereum resembles a familiar fractal pattern that appeared in 2018 and 2022. In both of these cycles, Ethereum's price experienced a euphoric rise, ultimately culminating in a sharp decline and a prolonged bear market.

These two cycles share the following key characteristics:

Higher price peaks accompanied by lower highs in the Relative Strength Index (RSI), which is a typical bearish divergence signal indicating that momentum is weakening.

ETH/USD weekly price chart. Source: TradingView

After the price peak (as shown at the top of the cycle in the image above), Ethereum experienced a significant pullback, often falling below key Fibonacci levels.

Cycle bottoms typically occur when the RSI falls into the oversold zone (below 30), with prices stabilizing near historical Fibonacci areas.

The current market structure is similar to previous trends.

In December 2024, Ether formed a higher price peak near $4,095, while the RSI formed a lower high—aligning with the bearish divergence seen at previous tops. This divergence marks the beginning of a sharp correction, similar to the patterns observed in 2018 and 2022.

Currently, Ethereum's price has fallen below the 1.0 Fibonacci retracement level, around $1,550. Meanwhile, its weekly RSI remains above the oversold threshold of 30, indicating that Ethereum still has room to decline, at least until the RSI falls below 30.

ETH/USD weekly RSI performance chart. Source: TradingView

This fractal pattern suggests that Ethereum may be in the final stages of its decline, with the next target price potentially between $990 and $1,240, aligning with the 0.618 to 0.786 Fibonacci retracement range.

Source: Mike McGlone

Ethereum NUPL Enters "Capitulation" Zone (Another Bottom Indicator)

Ethereum's Net Unrealized Profit/Loss (NUPL) has entered the "capitulation" zone—an on-chain phase where most investors hold Ethereum at a loss. Similar movements into this zone in previous cycles occurred near major market bottoms.

Ethereum NUPL vs. Price Chart. Source: Glassnode

In March 2020, the NUPL indicator turned negative just before Ethereum rebounded strongly after the COVID-19 market crash. A similar pattern appeared in June 2022 when the indicator entered the "capitulation" range, shortly before Ethereum established a bear market bottom around $880.

Now, as Ethereum enters this zone again, the current situation is roughly similar to previous bottom phases—and aligns with the key Fibonacci support level near $1,000.

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This article does not contain investment advice or recommendations. Every investment and trading activity involves risk, and readers should conduct their own research before making decisions.

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