Ethereum price came under intense pressure this week as its crash gained steam. The ETH/BTC pair plunged to a low of 0.0225, its lowest level since May 2020. It has dropped by over 75% from its highest level in December 2021. So, why is the Ethereum vs. Bitcoin pair crashing, and what’s next?
Ethereum Price Decline Continues
The Ethereum price is plunging against the US dollar and Bitcoin as concerns about its network continue. Recent data shows that Ethereum addresses have continued falling this year as many investors remain on the sidelines. Further numbers show that Wall Street investors are no longer interested in Ethereum. According to SoSoValue, spot Ethereum ETFs have continued to shed assets in the past few weeks. They have lost assets in the last three consecutive weeks, a trend that may continue if the trajectory accelerates.
These spot Ethereum ETFs hold $2.63 billion in assets, with the Blackrock Ethereum ETF (ETHA) having $2.4 billion. The other top Ethereum ETFs are two from Grayscale, followed by Fidelity, Bitwise, and VanEck. These funds have had a lackluster performance because Ethereum ETFs don’t provide staking income. As such, many investors prefer to buy Ethereum directly and then stake it through exchanges like Coinbase and Binance. Data show that the staked Ethereum market cap is over $94 billion.
The Ethereum price has also crashed as the network faces intense competition from Base, Arbitrum, Sui, and Binance. These chains have continued to gain market share in industries like decentralized finance (DeFi) and gaming. This trend has led to significant changes in the crypto sector regarding revenues or fees. Ethereum was the most profitable player in the crypto industry for a long time. It has been passed by Jito, Uniswap, Tron, and Circle today.
Bitcoin Dominance Surge Explained
The ETH/BTC pair has also crashed because Bitcoin has outperformed Ethereum and other cryptocurrencies. Bitcoin’s price has dropped 23% from its highest level this year. In contrast, most alums are down by a bigger margin. For example, Ethereum’s price has gone down by over 53% from its highest point in December last year. Other tokens like Solana, Cardano, and Hedera Hashgraph plunged by over 30% in the same period.
All this has led to a significant increase in Bitcoin’s dominance. Data by TradingView shows that its dominance has surged to 62.25%, its highest level since March 2021. It has risen by over 60% from its lowest level in 2022.
ETH/BTC Outlook
The weekly chart shows that the ETH to BTC pair peaked at 0.088 BTC in 2021 and has been in a strong downward trend since. It has already crashed below the key support level at 0.04911, the lowest swing in June 2022. The pair has moved below the lower side of the descending channel that started in September 2022 and ended late last year.
ETH/BTC remains below the 50-week and 200-week Exponential Moving Averages. (EMA). It has also plunged below the key support at 0.0233, the lowest point in December 2020. Popular oscillators like the Relative Strength Index (RSI) and the stochastic RSI have all continued falling.
Therefore, the path of least resistance for the pair is bearish. The next level to watch is 0.016, the lowest point in August 2019. This price target is about 32% below the current level. A move above the resistance at 0.03 will invalidate the bearish view.
Final thoughts
Reflecting more considerable worries about Ethereum’s network, declining interest from institutional investors, and growing competition from other blockchain platforms, the paper notes an apparent fall in the Ethereum (ETH) price, especially against Bitcoin (BTC). Reaching its lowest point since May 2020, the ETH/BTC pair has collapsed dramatically. It’s fallen over 75% from its December 2021 peak, indicating Ethereum’s significant loss of market supremacy vs. Bitcoin.
The declining price of Ethereum is ascribed to declining investor interest, mostly from big institutional players like Wall Street. Many prefer direct Ethereum investment with staking alternatives via exchanges like Coinbase and Binance as spot Ethereum ETFs have been losing assets and lack staking income, and these ETFs are a primary reason. Other blockchain initiatives such as Base, Arbitrum, Sui, and Berachain also present fierce competition for Ethereum. These substitutes are becoming popular in essential industries such as gaming and distributed finance (DeFi), lowering Ethereum’s market share and profitability.
