Key Points
- Ethereum’s price continues its downward trend, dropping to its lowest point since October 2023.
- The price decline is attributed to multiple factors, including increased competition and Ethereum’s weekly futures moving into backwardation.
Ethereum’s value against the US dollar and Bitcoin has been on a steady decline, reaching its lowest point since May 2020. The value dropped by 74% from its peak during the pandemic.
The cryptocurrency also fell to $1,770, marking its lowest point since October 2023 and a 57% decrease from its highest point in December of the previous year.
Factors Influencing Ethereum’s Price
The decline in Ethereum’s price can be attributed to several factors. These include ongoing ETF outflows, increased competition from both layer-1 and layer-2 networks, and Ethereum’s diminishing profitability in the crypto sector.
Analysts at Kraken also pointed out another contributing factor. Alexia Theodorou, the head of derivatives, noted that Ethereum’s weekly linear futures had entered backwardation for the first time since August of the previous year. In contrast, Bitcoin futures have remained in contango during this period.
Ethereum vs Bitcoin Price Analysis
The weekly ETH/BTC chart reveals a consistent decline over the past few years. The price remains below all moving averages, indicating that bears are in control. The price is now nearing the key support level of $0.02350, which was the lowest swing on December 20.
The Average Directional Index, a tool used to measure the strength of a trend, has risen to 38. A movement above 25 signifies a strengthening trend.
Meanwhile, the Relative Strength Index and the Stochastic Oscillator have reached the oversold level. This suggests that the token’s value will likely continue to fall, with sellers targeting the next point at $0.0173, the lowest swing in December 2019.
