Ethereum’s native token, Ether (ETH), has recently entered into a concerning downtrend against Bitcoin (BTC), with indications suggesting that this negative trajectory may persist well into 2025. Despite several dips into oversold territory, ETH has shown little sign of stabilization, mirroring past scenarios that point to further declines.
Ether’s Repeat Breakdown: More to Come?
The Relative Strength Index (RSI) for ETH over a three-day period remains below the critical level of 30, which traditionally suggests a possible bounce. Yet, historical analysis indicates that previous dips into oversold conditions have often been followed by subsequent downward movements. The market structure continues to exhibit bearish momentum.
Since mid-2024, the ETH/BTC trading pair has experienced multiple breakdowns, with losses recorded at 13%, 21%, 25%, and 19.5% in quick succession. Additionally, both the 50-day and 200-day Exponential Moving Averages (EMAs) indicate a lack of bullish strength as they trend downwards. Analyst @CarpeNoctom noted that the ETH/BTC pair has failed to establish a bullish divergence, despite consistently making lower lows while the RSI attempts to recover.
ETH/BTC three-day price chart. Source: TradingView
Investor Sentiment: ETF Outflows and On-chain Data
The current ‘cursed’ downtrend in the ETH/BTC pair contrasts starkly with the broader cryptocurrency market, particularly when considering ongoing outflows from U.S.-based spot ETH ETFs and negative on-chain data. The net flows into spot Ether ETFs have dipped by 9.8% in March to $2.54 billion, while spot Bitcoin ETF flows showed only a minor decline of 2.35% to $35.74 billion during the same period.
Interestingly, Ethereum’s gas fees have also plummeted, down by nearly 50 times from a year ago, signaling decreased network activity. Data analytics platform Nansen highlighted that, despite a rally towards the end of 2024, mainnet activity in terms of gas consumption has failed to recover, with many users shifting to alternative platforms like Solana and Layer 2 solutions.
Source: Ted Pillows
Projected Downside: What Lies Ahead for ETH?
The ETH/BTC pair is currently forming a bear pennant pattern on the daily chart, suggesting further downside potential. Should the price fall below the lower trendline, projections indicate a target around 0.01968 BTC, representing a potential decline of 15% from current levels. The persistent downward trajectory of the 50-day and 200-day EMAs supports this bearish outlook.
Despite the bleak projections, a bullish turnaround could occur if ETH/BTC breaches the upper resistance line of the pennant and converts the 50-day EMA into support.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
