Ethereum Hits 42-Month Low Against Bitcoin — Is This the Bottom or Will There Be More Pain?
Ethereum (ETH) has recently hit its lowest price in over three years compared to Bitcoin (BTC). Some analysts think this could be the bottom for Ethereum, but others believe there may be more downside to come. With Bitcoin’s dominance growing and Ethereum struggling, many investors are wondering what’s next for the second-largest cryptocurrency.
ETH/BTC Hits 42-Month Low
Ethereum’s price against Bitcoin has dropped to levels not seen in 42 months. The last time ETH/BTC was this low was back in April 2021. This significant drop is concerning for many traders, as it shows how much Ether has struggled in the market compared to Bitcoin.
According to Alex Thorn, head of research at Galaxy, the situation for Ethereum looks dire. In a recent post on X (formerly Twitter), Thorn pointed out that Ethereum has dropped 53% against Bitcoin since the Merge in September 2022. He wrote, “ETH/BTC just traded on a 0.03 handle for the first time in 3.5 years. What stops this train?”
Ethereum’s underperformance against Bitcoin is a worrying sign for many investors. While Bitcoin continues to show strength, Ethereum seems to be losing market share.
Bitcoin Dominance Grows
One major factor hurting Ethereum is the rising dominance of Bitcoin. Bitcoin’s dominance is now at 58%, meaning it makes up more than half of the entire cryptocurrency market. This is a huge increase and has put pressure on other cryptocurrencies like Ethereum.
With Bitcoin’s dominance increasing, Ethereum is losing ground. This has led to more people asking, “Is this the bottom for Ether, or will it continue to struggle against Bitcoin?”
Ethereum ETF Outflows Add to the Pressure
Another issue impacting Ethereum is the outflow of money from Ether ETFs. Exchange-traded funds (ETFs) allow investors to buy and sell cryptocurrencies easily, but they have not been kind to Ethereum lately. By February 2024, Ether ETFs saw $581 million in net outflows. This means more people are selling their shares in these funds than buying.
Most of these outflows have come from Grayscale’s Ether ETF, which has seen $2.7 billion leave. This significant outflow shows a lack of confidence in Ethereum as an investment. In contrast, Bitcoin ETFs have been doing much better. About 75% of new investments in the crypto space have gone into Bitcoin ETFs, pushing Bitcoin’s price past the $50,000 mark.
These Ether ETF outflows are one of the reasons why Ethereum’s price has been underperforming. When large amounts of money leave Ethereum, it puts downward pressure on the price and makes it harder for Ether to recover.
Will Ethereum Recover?
Despite the bad news, some analysts believe that Ethereum could be near a bottom. Crypto trader Anbessa recently noted in a post on X that Ethereum’s price has only been this low five times in its history. Each time, Ethereum went on to recover and reach higher prices.
Anbessa pointed out that the ETH/BTC pair recently dropped to a key Fibonacci retracement level at 0.03845 BTC. He believes this could be the bottom for Ethereum, saying, “ETH/BTC throwback to fib 0,382 at 0.03845 BTC. This should be the bottom.” He also highlighted that every time Ethereum has been this oversold, it has bounced back and gone much higher.
Many traders are watching these historical patterns closely. If Ethereum follows the same trends as in the past, we could see a recovery in the coming months.
What’s Next for Ether and Bitcoin?
While some are optimistic about Ethereum’s chances of recovery, others remain cautious. Popular investor Fred Krueger believes that Ethereum is on the “edge of collapse” against Bitcoin. He pointed out that not all ETFs are created equal, and Bitcoin ETFs are much more popular with investors than Ethereum ETFs.
Krueger shared data showing how Ether ETFs have struggled, while Bitcoin ETFs continue to attract more and more investment. This difference in ETF performance is a key reason why Ethereum’s price has been under pressure, and Krueger thinks this trend could continue.
So, is this the bottom for Ethereum, or will it keep losing market share to Bitcoin? The answer is unclear, and it depends on several factors. If Bitcoin’s dominance keeps rising and Ether ETFs continue to see outflows, Ethereum could face more pain. On the other hand, if Ethereum can find support at these low levels and Bitcoin’s dominance stalls, Ether may recover and regain some ground.
Ethereum’s 42-month low against Bitcoin is a significant moment for the cryptocurrency market. While some analysts believe this could be the bottom for Ethereum, others are not so sure. Bitcoin’s rising dominance and the outflow of money from Ether ETFs are both major challenges that Ethereum will have to overcome.
Investors should keep an eye on the ETH/BTC pair and watch for signs of a recovery or further decline. If Ethereum follows historical patterns, there is a chance that it could bounce back. However, the growing popularity of Bitcoin ETFs and the continued outflows from Ether ETFs are serious headwinds that could make it difficult for Ethereum to regain its footing.
For now, the future of Ethereum remains uncertain, and investors will need to stay cautious as the cryptocurrency market continues to evolve. Whether this is the bottom for Ether or if there’s more downside to come will depend on how these trends play out in the coming months.
