Ethereum price continues to crash against Bitcoin as its crisis worsens. The ETH/BTC pair plummeted to 0.0186, its lowest level since January 2020 and 80% below its peak in December 2020.
ETH/BTC Price Analysis
The weekly chart shows that the ETH/BTC pair has been in a strong downward trend in the past few years. It has plunged from 0.088 in 2021 to a low of 0.0188. This sell-off accelerated after it formed a death cross pattern in April of last year, when the 200-week and 50-week moving averages crossed each other.
The Relative Strength Index (RSI) and other oscillators continue to move downward, a sign that they are gaining downward momentum. Also, the pair’s sell-off is gaining momentum as the Average Directional Index (ADX) has surged to 45. An ADX above 25 is usually a sign that a trend is accelerating.
The ETH/BTC pair has formed an inverse cup and handle pattern, another highly bearish continuation sign in technical analysis. This pattern comprises a horizontal line and a rounded top. It also has some consolidation to form the handle section.
Therefore, the least resistant path for the Ethereum price against Bitcoin is bearish, and the trend is likely to continue. This sell-off will be confirmed if the price drops below the key support level of 0.01635. If this happens, the next point to watch will be at 0.0010, the all-time low.
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Why Ethereum Price is Falling vs Bitcoin
Ethereum price has crashed against Bitcoin because investors believe that BTC is a better store of value. A notable example of this is the ETF market, where spot Bitcoin funds have experienced a net inflow of approximately $2 billion, compared to the over $35 billion attracted by Bitcoin funds from Wall Street investors.
Furthermore, the Ethereum price crashed due to rising competition in the layer-1 blockchain industry. Recent data shows that the sector has become highly competitive, with networks like Berachain, Sui, Aptos, and Sonic gaining market share.
Most of Ethereum’s real competition comes from layer-2 networks like Base and Arbitrum. A layer-2 network is a solution that enhances Ethereum’s performance by handling transactions on its network. L2 networks are faster and cheaper than Ethereum.
For example, L2 networks like Base and Arbitrum have attracted over $11.6 billion and $10.6 billion in bridged assets. Some of these funds would normally be invested in Ethereum.
Furthermore, analysts have grown increasingly critical of Ethereum over time. Most recently, Standard Chartered’s analysts lowered their target from $10,000 to $4,000.
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