The price of the second-largest cryptocurrency by market capitalization is on the verge of forming a “death cross”—a technical signal indicating a potential bearish trend.

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

On February 25, Ethereum’s price dropped to $2,325, and the “fast” moving average was close to crossing the “slow” one below it.

Hedge Against Decline

Bearish sentiment dominates the Ethereum perpetual contracts market.

Derivative trader Gordon Grant told The Block that this is linked to concerns about hackers selling stolen coins after exploiting a vulnerability in the smart contract of one of Bybit’s cold Ethereum wallets, leading to a $1.4 billion theft.

He noted a shift in demand from call options to put options in near-term derivatives.

QCP Capital analysts reached similar conclusions, highlighting prevailing pessimism through March expirations. They estimated that the hackers who breached Bybit have become the 14th-largest Ethereum holders.

A similar trend is observed in Bitcoin perpetual contracts.

According to Coinglass, open interest on Binance increased by 12,000 BTC in a single day amid the price drop to year-to-date lows, indicating an increase in short positions, CoinDesk reported.

Another signal supporting a bearish scenario is the continued decline of cumulative volume delta (CVD) into negative territory, suggesting selling pressure is outpacing buying activity.

Meanwhile, CryptoQuant recorded a transfer of 24,630 BTC to long-term holder wallets—addresses linked to OTC platforms accumulating coins for extended storage.

As altcoins decline more rapidly, Bitcoin’s dominance index has surged to its highest level since March 2021.

CryptoRank pointed to internal disputes within the Ethereum Foundation and the fallout from meme coin controversies on Solana as key factors impacting Ethereum’s and other competitors’ positions against Bitcoin.

Previously, Bitfinex described Bitcoin’s current correction as “critical.”

CryptoQuant had also warned about the risk of BTC entering a bearish phase.

Earlier, CoinDesk outlined three key risks that could threaten Bitcoin’s ability to stay above $90,000.