The second-largest cryptocurrency has lagged Bitcoin this year due to slow growth in its exchange-traded funds and competition from other layer 1 and layer 2 blockchains.

Ethereum (ETH) is up less than 20% in 2024, while Bitcoin (BTC) is up more than 50%.

Technical data points to further Ether weakness in the coming months. On the weekly chart, the coin formed a double-top chart pattern around $4,000. It fell below the neckline of this pattern at $2,824 in July, confirming the bearish breakout.

Ethereum also formed a death cross pattern as the 200-day and 50-day Hull moving averages made a bearish crossover. The HMA reduces the lag by using weighted moving averages to smooth out the price data.

The last time Ethereum formed a death cross on the weekly chart was in March 2022, and the coin subsequently fell by more than 70%.

Ether has also formed a bearish pennant chart pattern, characterized by a long vertical line followed by a symmetrical triangle. Typically, an asset experiences a bearish breakout when the two lines of the triangle converge.

Moreover, this consolidation is occurring at the 50% Fibonacci retracement level. Therefore, there is an increasing chance that the coin will see a strong bearish breakout in the short term, with the next target to watch being $2,111, its lowest point from August 5.

In addition to technical weaknesses, Ethereum also faces significant fundamental challenges. First, Ether ETFs have not seen strong inflows within a few months of their launch.

According to SoSoValue, these funds have seen cumulative outflows of over $530 million, mainly driven by the Grayscale Ethereum Fund. On the other hand, Bitcoin ETFs have crossed the $20 billion entry level, indicating higher demand from institutional investors.

Ethereum is also seeing intense competition in areas it previously dominated, like DeFi and NFTs. Data from DeFi Llama shows that Solana has outpaced Ethereum in terms of DEX volume over the past seven days. It processed $10.87 billion, compared to Ethereum’s $9.69 billion.

If the trend continues, Solana could overtake Ethereum this month. Solana has managed $23.9 billion so far, compared to Ethereum’s $24 billion.