FameEX Hot Topics | Ethereum Faces Challenges as ETH Breaks 8-Year Trend Against Bitcoin

The native token of Ethereum, Ether (ETH), has slipped below a critical long-standing support level against Bitcoin (BTC), raising concerns among analysts. The ETH/BTC pair recently broke beneath an ascending trendline that has historically coincided with market bottoms since 2016. This trendline supported notable rebounds, including a 300% surge between December 2020 and December 2021 and an 1,800% rally from January to May 2017.

In November 2024, Ethereum bulls failed to hold this crucial support, leading ETH/BTC to drop by 15%, accompanied by increased trading volume. In technical analysis, breaking a support level with heightened trading activity signals strong selling pressure, suggesting further declines in the coming weeks. “Ethereum is dying a slow death,” remarked Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital, highlighting Ethereum's ongoing struggles.

One major factor contributing to Ethereum’s underperformance is the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States, which have gained significant traction among retail and institutional investors. In contrast, Ethereum’s own spot ETF offerings have underperformed. Additionally, Bitcoin’s recent halving event in April 2024 has further bolstered its appeal, leading to capital outflows from Ethereum into Bitcoin.

Ethereum also missed out on key market narratives during Donald Trump’s presidential campaign, where he suggested making Bitcoin a strategic reserve asset for the U.S., largely sidelining Ethereum. These dynamics have significantly impacted Ethereum’s crypto market dominance (ETH.D), which has now fallen to its lowest level since April 2021.

Technical indicators suggest ETH/BTC is entering a breakdown phase within an inverse cup-and-handle (IC&H) pattern. If this scenario unfolds, ETH/BTC could drop to a key support level of 0.017 BTC—a level last seen during the August 2019 to January 2020 period—marking a potential 50% decline from current prices. This bearish outlook highlights Ethereum’s ongoing challenges in maintaining its position in the crypto market.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.