A bearish pennant pattern has formed on the daily chart of Ethereum, indicating a potential for a significant downward price movement.

The deteriorating technical outlook, coupled with declining on-chain activity, suggests a possible continuation of the downtrend. In this scenario, the price of the leading altcoin could drop to $1100.

This chart pattern typically emerges after a sharp decline when the price consolidates within an ascending triangle.

Daily ETH/USD chart from Bitstamp. Source: TradingView.

The pattern will be confirmed if the price breaks below the lower boundary around $1950 on high volume. In that case, the asset could fall by the same magnitude as the previous decline, potentially reaching $1100 (a 43% drop from current levels).

According to crypto analyst Crypto Patel, to negate this scenario, prices need to hold above the support level at $1800.

$ETH Broke My Heart Twice

First Dagger → Bull Flag lost & BreakDown $3,700 Level.
Second Dagger → Ascending Triangle failed and Broken $3,000 Support

Now Trading Between $2000-$1850

Watching These Levels Closely:
Hold $1,800 → Relief Bounce Toward $2,650
Lose $1,800 →… pic.twitter.com/rpAYK2yyNa

— Crypto Patel (@CryptoPatel) February 16, 2026

Decline in On-Chain Activity

The drop in Ethereum's network activity is also putting pressure on the asset's price. On February 18, the daily transaction volume was 1.95 million, approximately 33% lower than the figure from February 7 (2.89 million).

Daily transaction volume dynamics in the Ethereum network. Source: Etherscan.

A similar depth of decline was observed in January 2024, when the price of the leading altcoin fell by 30%.

The stagnation in on-chain activity is further confirmed by the dynamics of Total Value Locked (TVL) in DeFi applications.

TVL dynamics and volumes on DEX in the Ethereum DeFi ecosystem. Source: DefiLlama.

Since the beginning of February, the total value in the ecosystem has decreased by more than 22%, dropping to $54.5 billion by February 18, down from $70 billion at the start of the month.

The decline in TVL is accompanied by a drop in trading activity on DEX, including the largest non-custodial exchange Uniswap.

Total TVL and aggregate turnover in the DEX segment. Source: DefiLlama.

Another negative factor has been the four-week capital outflow from Ethereum-based ETFs.

It’s worth noting that a bearish pennant has also formed on Bitcoin's daily chart, with a potential target of $56,000 within February.