Ethereum’s native token, Ether (ETH), is in the spotlight again, and not for the reasons enthusiasts might hope. ETH has been dipping into oversold territory against Bitcoin (BTC) repeatedly, yet it seems like the altcoin is struggling to find a solid price bottom. This scenario feels like déjà vu, echoing a past market structure that suggests we might see a repeat performance in the coming months.
Let’s dive into the numbers. The relative strength index (RSI) for ETH on a 3-day timeframe is sitting below 30. Typically, this signals a potential bounce back. But hold your horses! Historical patterns show that previous dips into oversold conditions haven’t marked a definitive bottom. Instead, each dip has been followed by another descent, indicating a persistent bearish vibe.
Since mid-2024, the ETH/BTC pair has been on a rollercoaster of breakdowns, with losses of 13%, 21%, 25%, and 19.5% happening in quick succession. The 50-day and 200-day EMAs are trending lower, confirming the lack of bullish momentum. Market analyst @CarpeNoctom has pointed out that ETH’s price performance is less than stellar, noting that the ETH/BTC pair hasn’t confirmed a bullish divergence on its weekly chart.
The broader crypto market paints a similar picture. The “cursed” ETH/BTC downtrend is evident when you look at the persistent outflows from US-based spot ETH ETFs and negative onchain data. Spot Ether ETFs have seen net flows drop by 9.8% in March to $2.54 billion, while spot Bitcoin ETF net flows are down by only 2.35% to $35.74 billion.
Ethereum’s gas fees are another piece of this puzzle. As of March, they were around 1.12 GWEI, down nearly 50 times from what they were just a year ago. Despite a rally in ETH prices towards the end of 2024, mainnet activity measured by gas consumption hasn’t fully recovered. Much of the activity has shifted to Solana and Layer 2 solutions over the past year.
Nansen, a data analytics platform, remains cautiously bearish on ETH due to its unfavorable risk/reward ratio compared to BTC and other altcoins with niche market focuses. The lack of demand for ETH relative to Bitcoin is further highlighted by future volume data. Bitcoin futures volume has rebounded by 32% from its February lows, reaching $57 billion in mid-March, while ETH’s trading activity remains mostly flat.
Now, here’s the kicker: The ETH/BTC pair could drop another 15%. It’s forming a bear pennant pattern on the daily chart, characterized by consolidation within converging trendlines after a steep decline. If this pattern resolves as expected, we could see ETH/BTC’s downside target for April at 0.01968 BTC, down 15% from current levels.
But don’t lose hope just yet! A bullish invalidation could occur if ETH/BTC breaks above the pennant’s upper resistance and flips the 50-day EMA into support. This would signal a potential reversal in fortunes for Ethereum enthusiasts.
Remember, this article isn’t investment advice. Every move in the crypto world involves risk, so do your own research before making any decisions. Keep your eyes peeled for more updates as the crypto landscape continues to evolve!
