Key Points
- The ETH/BTC pair has significantly dropped, indicating a decrease in Ethereum demand compared to Bitcoin.
- Ethereum’s valuation against Bitcoin has reached a five-year low, potentially signaling a bearish short-term outlook for Ethereum.
The ETH/BTC pair has experienced a significant decline, indicating a weakening demand for Ethereum in relation to Bitcoin.
If Bitcoin continues to perform better, Ethereum could face more downward pressure.
Ethereum’s Valuation Against Bitcoin
Ethereum’s valuation against Bitcoin has sunk to a five-year low. Historically, Bitcoin’s consolidation or local peaks have led to increased capital flow into large-cap altcoins, triggering short-term Ethereum rallies.
In May 2024, the ETH/BTC pair reached a three-month high, with daily gains surpassing 10% as Bitcoin encountered resistance at $70K.
Despite Bitcoin’s ongoing decline, the ETH/BTC pair remained steady, indicating sustained capital inflows.
This strength directly influenced Ethereum’s price action, leading to its largest single-day gain of 19.25%, reaching $3,697.80.
ETH/BTC at Five-Year Low
Fast forward five months, the ETH/BTC pair has plunged to a five-year low, directly impacting Ethereum’s price. For the first time in two years, Ethereum has lost the crucial $2,000 support zone, leading to panic selling.
Meanwhile, Bitcoin’s dominance remains firmly above 60%, despite fragile market sentiment. Historically, a weakening ETH/BTC ratio has correlated with surges in Bitcoin dominance.
This suggests an ongoing capital shift towards Bitcoin over altcoins, potentially indicating a bearish short-term outlook for Ethereum.
Ethereum’s Cost Basis Distribution (CBD) highlights key support zones based on recent accumulation trends.
Over the past week, Ethereum briefly dipped below the major $1.88k cluster, but on-chain data suggests weak demand at this level.
However, new accumulation has emerged at $1.9k, potentially establishing a stronger support zone.
If Bitcoin breaks resistance, Ethereum could reclaim $2K, but the ETH/BTC downtrend raises concerns.
Ethereum’s historically high-risk, high-reward appeal seems to be diminishing during market downturns, a significant change that could impact its long-term trajectory.
