Ethereum on the Brink of Death Cross: A Bearish Indicator Emerges

The second largest cryptocurrency by market capitalization is nearing a «death cross»—a potential signal of a bear market.

This indicator appears when the 50-day moving average (DMA) crosses below the 200-day DMA.

On February 25, the price of Ethereum dropped to $2,325, with the «fast» moving average just shy of crossing below its «slow» counterpart.

Bearish sentiment is observed in Ethereum-based perpetual contracts.

Gordon Grant, a derivatives trader, explained in an interview with The Block that this sentiment is linked to concerns over the potential sale of coins by hackers who stole $1.4 billion due to a change in the smart contract logic of one of Bybit’s cold Ethereum wallets.

The analyst noted a shift in demand from call options to put options in the near-term derivatives market.

QCP Capital reached similar conclusions, highlighting a prevailing pessimism leading up to the expirations at the end of March. Specialists estimated that the Bybit hackers have become the 14th largest holders of Ethereum.

A similar trend is seen in perpetual Bitcoin contracts.

According to Coinglass, amidst a decline in prices to yearly lows, open interest on Binance surged by 12,000 BTC in one day, indicating an increase in short positions, as reported by CoinDesk.

Further support for a bearish scenario is shown by the delta of cumulative volume (CVD) moving into negative territory, suggesting that selling pressures are outpacing buying.

Simultaneously, CryptoQuant reported the transfer of 24,630 BTC into the wallets of holders—addresses linked to over-the-counter (OTC) platforms that accumulate coins for long-term storage.

Against a backdrop of declining altcoins, Bitcoin’s dominance index soared to its highest level since March 2021.

CryptoRank highlighted the impact of controversies within the Ethereum Foundation and the fallout from scandals surrounding meme-coins on the prices of major competitors to Bitcoin.

It’s worth noting that analysts at Bitfinex have described the current correction in Bitcoin as «critical.»

Previously, CryptoQuant warned about the threat of Bitcoin entering a bear phase.

Earlier, CoinDesk identified three risks that could lead to the first cryptocurrency losing its $90,000 price level.