Ethereum’s Dominance Drops Below 14%: What Does This Mean for the Market?

Ethereum’s dominance in the cryptocurrency market has experienced a significant decline, falling from 18.85% a year ago to 13.36%. Analyst Benjamin Cowen has noted this downward trend, indicating potential selling pressure on ETH as it struggles to maintain higher dominance levels.

Historically, Ethereum has faced resistance at the 16% and 22% dominance levels, failing to break through these barriers since 2018. This ongoing decline has formed a descending triangle pattern, typically associated with a bearish trend.

Source: TradingView

Is Ethereum Headed for a Free-fall to 9-10% Dominance?

Cowen suggests that if the downward momentum continues, Ethereum’s dominance could fall to the 9-10% range, indicating a deeper decline driven by decreased buying interest. The 9% support level may become critical for ETH, particularly if market trends do not favor the altcoin sector in the coming months.

If Ethereum manages to hold the 9% support level, it may stabilize its dominance and pave the way for a potential rebound in 2025. However, breaking below 9% could signal an extended period of underperformance compared to other altcoins and the overall crypto market.

Recent Price Action and Market Activity

At the time of writing, Ethereum is trading at $2,542.29 with a slight increase in the last 24 hours but a decline of 3.11% over the past week. The 24-hour trading volume is around $17.6 billion, indicating active trading. With a circulating supply of 120 million ETH, the market cap is approximately $306.29 billion.

According to DefiLlama data, the Total Value Locked (TVL) on Ethereum’s network is $47.91 billion, with daily fees and revenue showing sustained usage despite the declining dominance.

Netflow Data Analysis

Netflow data from IntoTheBlock reveals a significant increase in short-term inflows over the past 7 days, suggesting a rise in assets being moved to exchanges for selling or profit-taking. However, over a 90-day period, there has been a substantial shift towards net outflows, indicating a longer-term trend of investors withdrawing ETH from exchanges for storage or staking.

Source: IntoTheBlock

While short-term inflows align with bearish market sentiment, the net outflows point towards possible accumulation of Ethereum for the long term. Analysts believe that despite potential short-term declines, Ethereum could see a bounce back in 2025.