Ethereum’s Native Token Slips Below Longest-Serving Support Level Against Bitcoin
The Ethereum native token, Ether (ETH), has recently fallen below its longest-serving support level against Bitcoin (BTC). This development has led top analysts to conclude that the ETH/BTC pair is "dying a slow death."
A Brief History of ETH/BTC’s Ascending Trendline Support
Notably, the ETH/BTC pair broke below the ascending trendline support that has coincided with its market bottoms since 2016. This includes the pair’s significant recoveries between December 2020 and December 2021 (300% rebound) and January 2017 and May 2017 (1,800% recovery). The ETH/BTC 6-week performance chart shows this trendline support level.
However, in November 2024, Ethereum bulls could not defend the support level. The ETH/BTC pair dropped by around 15% below it, accompanied by a rise in trading volumes. In technical analysis, losing a support level—especially amid increasing trading activity—indicates strong selling pressure, meaning ETH/BTC may decline further in the coming weeks.
Tuur Demeester’s Take on Ethereum’s Situation
"Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital," commented, "Ethereum is dying a slow death." This statement highlights the dire situation faced by Ethereum’s native token.
Reasons Behind Ethereum’s Underperformance
In 2024, ETH/BTC has underperformed largely due to several factors:
- Launch of Spot Bitcoin ETFs: The launch of spot Bitcoin exchange-traded funds (ETF) in the United States has increased BTC’s appeal among retail and institutional investors.
- Underperformance of Ethereum ETF: The underperformance of Ethereum’s own spot ETF has also contributed to ETH/BTC’s decline.
- Bitcoin’s Fourth Halving: Bitcoin’s fourth halving in April has increased its scarcity, making it more attractive to investors.
- Growing Adoption of Solana: The growing adoption of Solana (SOL), Ethereum’s top smart contracts rival, has further contributed to ETH/BTC’s decline. SOL/ETH has surged by over 925% since December 2022.
Ethereum Misses Key Headlines
Ethereum also missed key headlines during the Donald Trump election campaign, wherein he flirted with the idea of making Bitcoin a strategic reserve asset in the US. This lack of attention has resulted in strong declines in Ethereum’s crypto market dominance (ETH.D), now at its lowest since April 2021.
ETH Price Could Drop Another 50%
Chart technicals show ETH/BTC entering the breakdown stage of its prevailing inverse cup-and-handle (IC&H) pattern. The IC&H pattern is confirmed by a rounded top, indicating the loss of momentum in an uptrend, followed by a smaller upward consolidation, representing a temporary pause or consolidation before resuming a downward move.
The breakdown scenario in ETH/BTC’s case brings the downside target for 2024 to 0.017 BTC, a key support level from the August 2019-January 2020 period. This represents a potential drop of 50% from today’s prices.
Contrasting Scenarios
Conversely, a strong rebound from the current support level of around 0.0317 BTC—coinciding with the 0.786 Fib line—could invalidate the IC&H pattern, sending the pair toward 0.043 BTC next by 2024’s end.
Market Risks and Considerations
Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article does not contain investment advice or recommendations. Explore more articles like this
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