ETH/BTC hits 0.019, with technicals and macro pressures pointing to potential record-breaking downside.
Ethereum Continues to Underperform Bitcoin
Ethereum’s decline shows no signs of slowing as the ETH/BTC trading pair has plummeted to 0.019 its lowest level since January 2020. This marks an over 80% drop from the December 2021 peak of 0.088, and the technical outlook suggests the worst may not be over yet.
ETH has now posted losses for three consecutive weeks, and its dollar price has slipped below $1,500, down from its 2023 high near $4,000. Ethereum’s dominance in the crypto market has also fallen sharply, losing nearly 67% from its 2021 highs and nearing levels last seen in 2022.
The Merge Fails to Halt Decline
Ethereum’s long-anticipated transition to proof-of-stake in September 2022 known as The Merge was meant to deliver scalability and energy efficiency. Instead, it appears to have coincided with a long-term selloff, with investor sentiment failing to recover.
Compounding the decline is Ethereum’s struggle to attract institutional inflows. Spot ETH ETFs, launched with significant expectations, have recorded underwhelming performance. Total ETF assets remain at just $4.9 billion, compared to Bitcoin’s $85 billion in investment products underscoring ETH’s weaker appeal as a store of value.
Rising Competition in Ethereum’s Own Ecosystem
Ethereum’s dominance is being further eroded by fierce competition not just from alternative L1s like Solana and Avalanche, but from within its own layer-2 ecosystem.
Layer-2 networks such as Base, Arbitrum, Polygon, and Optimism are taking an increasing share of the transactional load. According to DeFi Llama, decentralized exchanges (DEXs) on Ethereum processed $57.9 billion in trading volume in the last 30 days, while L2 platforms handled $35 billion a sizable and growing share.
Fee revenue has also become a point of concern. Ethereum now trails behind Tron, Solana, and even newer entrants like Jito in profitability metrics a factor that continues to weigh on investor sentiment.
Bearish Technical Signals: Inverse Cup and Handle Forming
The charts are painting a grim picture. ETH has formed an inverse cup and handle pattern on the weekly timeframe a classic bearish continuation setup. This pattern suggests that the recent drop is not a temporary correction but a continuation of a larger downtrend.
Adding to the bearish narrative is the death cross that occurred last year when the 50-week moving average crossed below the 200-week MA. Since then, downward momentum has only intensified.
The Average Directional Index (ADX), which measures trend strength, has surged to 44 a level that confirms the current downtrend is gaining traction. Based on technical projections from the pattern, ETH/BTC could fall to as low as 0.0025, which would mark a new all-time low.
Outlook: More Pain Ahead?
Ethereum’s near-term prospects remain shaky. With little institutional demand, rising L2 dominance, and weaker fee generation, ETH appears to be caught in a prolonged bear phase.
Unless there is a clear catalyst such as a shift in Fed policy, renewed DeFi momentum, or a breakthrough in ETF adoption Ethereum may continue to underperform not just against Bitcoin, but the broader market.
While long-term believers in Ethereum’s technology may see this as a buying opportunity, technical analysts caution that more downside may be on the horizon before any sustained recovery takes place.
