Ethereum’s token, Ether (ETH), has hit multi-year lows against Bitcoin (BTC), raising concerns among analysts for more potential declines. Recently, the ETH/BTC trading pair dropped to its lowest since May 2020, losing over 85% from its peak in 2017. This ongoing downtrend is fueled by several factors, including fierce competition from other blockchains like Solana and the recent influx of money into Bitcoin ETFs, which has impacted the broader Market. The current momentum indicators suggest that Ether’s struggle may continue, with a bearish outlook prevailing unless significant resistance levels are reclaimed. Traders will watch for any signs of stabilization to gauge if a potential rebound is on the horizon.
Ethereum’s native cryptocurrency, Ether (ETH), has recently plummeted to multi-year lows against Bitcoin (BTC), leading analysts to speculate that the decline could continue in the upcoming weeks.
Falling Knife Warning Fuels Sell-Off Risks
On March 13, the ETH/BTC trading pair, which measures Ether’s strength relative to Bitcoin, fell by over 1.50% and hit $0.022—its lowest point since May 2020. This downward trajectory has been part of a multi-year trend that began when Ethereum hit an all-time high of $0.156 in June 2017. Since then, ETH has dropped by more than 85%, highlighting its growing weakness compared to BTC.
On the two-week ETH/BTC chart, the Relative Strength Index (RSI)—a momentum indicator—reached a record low of 23.32. Normally, an RSI below 30 indicates that an asset might be oversold and could rebound. However, Ethereum’s RSI continues to decline, indicating that its downward trend is accelerating rather than stabilizing.
Crypto analyst Alessandro Ottaviani has referred to this situation as a “falling knife” scenario, suggesting that attempting to buy at what appears to be a low price may lead to further losses. Traders will look for signs of stabilization in the RSI and recovery of critical resistance levels to gauge when a reversal might occur. Past behavior shows that if ETH rebounded from the $0.022 level, it could lead to another significant rally.
ETH/BTC Fundamentals Support a Bearish Outlook
The outlook for Ether appears increasingly grim not just from technical standpoints but also due to fundamental factors. Ethereum faces stiff competition from rival blockchain platforms like Solana (SOL). Recent data indicates that Solana’s decentralized exchange volumes have surpassed those of Ethereum, even amidst declines in memecoin trading.
Moreover, the introduction of spot Bitcoin ETFs has altered traditional Market dynamics that typically favored altcoins like Ethereum. Inflows into Bitcoin ETFs have drained liquidity from the broader altcoin space, further contributing to a bearish outlook for ETH.
ETH is also dealing with Ethereum-specific selling pressures. The recent Bybit hack reportedly caused significant liquidations of ETH, which may contribute to its declining Market value.
In conclusion, with the ETH/BTC pair looking increasingly weak and various external factors playing a role in its decline, observers will be closely watching how the Market reacts in the coming weeks.
This analysis highlights the current challenges facing Ethereum and suggests that, until there are signs of recovery, investors should proceed with caution.
Is another 30% crash versus Bitcoin coming? Here are some frequently asked questions that might help clarify this topic.
What does a 30% crash mean for Bitcoin?
A 30% crash means that Bitcoin’s price could drop by 30% from its current value. If Bitcoin is at $30,000, a crash would bring it down to $21,000.
Is a crash likely to happen again?
Predicting price crashes is tough. While Bitcoin has experienced significant drops before, it is hard to say if or when another crash might happen in the future.
What causes Bitcoin to crash?
Several factors can lead to a crash. These include Market speculation, regulatory changes, or economic events that impact investor confidence.
How can I protect my investment?
To protect your investment, consider diversifying your portfolio, only investing what you can afford to lose, and staying updated on Market trends.
Should I buy Bitcoin now or wait?
This decision depends on your personal financial situation and risk tolerance. It can be wise to do thorough research and seek advice from financial experts before investing.