Ethereum’s native token, Ether (ETH), has recently demonstrated a bearish trend, dropping 18.47% in March and marking four consecutive red monthly candles. Such a trend indicates a market structure not seen since the bear market of 2022, leading analysts to debate whether ETH is nearing a bottom or if further declines are imminent.
The Ethereum/Bitcoin ratio hit a five-year low of 0.021 on March 30. This ratio, which serves as a benchmark for ETH’s performance against Bitcoin (BTC), underscores Ether’s relative underperformance over the last five years. Intriguingly, this ratio was similarly low in May 2020 when ETH was valued between $150 and $300.
Ethereum/Bitcoin 1-month chart. Source: Cointelegraph/TradingView
Data from Token Terminal show that Ethereum’s monthly fees fell to $22 million in March, marking the lowest level since June 2020, indicating reduced network activity and weaker market interest. Lower network fees suggest diminished utility of the Ethereum platform, a concern for investors.
Ethereum fees and price. Source: token terminal
Yet, Ethereum analyst VentureFounder has pointed out the possibility of a bottom forming in the ETH/BTC ratio, projecting a potential range between 0.017 and 0.022, suggesting that a further drop might occur before a recovery is realized. The analyst noted similarities to the reduced market activity witnessed during the 2018-2019 Fed tightening and quantitative easing cycle.
“Maybe another lower low RSI and one more push downward—lots of similarity with 2018-2019 Fed tightening & QE cycle. Expecting the first higher high after May FOMC when Fed ends QT & begins QE.”
Ethereum/Bitcoin analysis by VentureFounder. Source: X.com
Historically, Ethereum has shown that after experiencing three or more consecutive bearish monthly candles, a short-term bottom often follows. Notably, during consecutive red months in 2018, prices surged by 83% afterward. Although the market consolidated for nearly a year after three bearish months in 2022, the historical data shows a strong probability of positive returns; in fact, Ethereum has a 75% chance of closing green in April.
Considering that Q2 has historically been favorable for Ethereum, with average returns nearing 60.59%, the current trends create an intriguing scenario for potential recovery.
Ethereum Quarterly returns. Source: CoinGlass
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
