Ethereum Sentiment Most Fearful Since Terra Collapse in 2022 — Will ETH Decline Further?

Ethereum’s market sentiment has recently entered a state of ‘Fear’ for the first time since the Terra collapse in 2022, raising concerns about the potential for further declines in Ether’s (ETH) price.

ETH Traders’ Losses Are Mounting, Raising Panic Selloff Fears

As of March 19, Ethereum’s Net Unrealized Profit/Loss (NUPL) metric had dipped to 0.16, indicating a growing ‘fear’ sentiment in the market.

For the unversed, NUPL is a valuable on-chain indicator that measures the difference between relative unrealized profit and relative unrealized loss. The metric is represented on a scale from -1 to +1, with different colors indicating investor sentiment:

• Rising NUPL (Bull Markets):
  • Optimism → Belief → Euphoria (Yellow → Green → Blue) indicate increasing unrealized profits as ETH rallies.
  • Blue (Euphoria/Greed) often signals overheated conditions and potential cycle tops.

• Falling NUPL (Bear Markets):
  • Denial → Anxiety → Fear → Capitulation (Green → Yellow → Orange → Red) represents decreasing unrealized profits as ETH declines.
  • Red (Capitulation) historically marks market bottoms, as investors sell at heavy losses.

Ethereum’s NUPL has moved from Anxiety (yellow) to Fear (orange), indicating that many investors are seeing their unrealized profits shrink. This is a similar stage to the post-Terra collapse in mid-2022 when ETH fell under $900 from over $3,500.

As of 2025, other bearish factors are contributing to Ethereum’s underperformance in the broader crypto market, namely:

• Declining Gas Fees: Ethereum’s on-chain activity has weakened, with its median gas consumption down over 95% in a year, suggesting a weakening usage of the Ethereum blockchain. 

• Negative Spot Ethereum ETF Flows: There have been persistent outflows from spot Ethereum exchange-traded funds (ETFs), signaling a risk-off behavior among investors. In March, U.S.-based spot Ether ETFs recorded outflows totaling $330 million.

• Increased Competition: Alternative layer-1 blockchains, such as Solana, have been gaining traction, offering faster and cheaper transactions. This competition has diverted some users and developers from Ethereum, impacting its market position.

Ethereum Stares At Potential 15% Decline in March/April

Ethereum’s price action on the 4-hour chart suggests the formation of a bear pennant, a continuation pattern that typically signals further downside. The structure consists of a sharp decline, followed by consolidation within converging trendlines, hinting at a potential breakdown.

As of March 19, ETH was trading for around $1,940, testing the 50-period exponential moving average (50-4H EMA; the red wave) as resistance. Rejection from this level could accelerate selling pressure, triggering a breakdown below the pennant’s support.

The measured move—determined by the initial flagpole’s length—suggests a downside target near $1,624, representing a potential 15% decline.

The relative strength index (54.84) hovers in neutral territory, offering no immediate relief for bulls. Meanwhile, the 200-period EMA (the blue wave) at around $2,260 remains well above the current price, reinforcing Ethereum’s bearish outlook.

On a brighter note, certain indicators still anticipate Ether to rebound sharply in 2025.