The Breakdown of the Ascending Trendline Support
Ethereum’s native token, Ether (ETH), has recently slipped below its longest-serving support level against Bitcoin (BTC). This development has led top analysts to conclude that Ethereum is "dying a slow death." The ETH/BTC pair broke below the ascending trendline support that has coincided with its market bottoms since 2016. Notably, this includes the pair’s 300% rebound between December 2020 and December 2021, as well as a 1,800% recovery between January 2017 and May 2018.
Losing Support Amidst Increasing Trading Activity
In November 2024, Ethereum bulls failed to defend the support level. The ETH/BTC pair dropped by around 15% below it, accompanied by a rise in trading volumes. In technical analysis, losing a support level—especially amidst increasing trading activity—indicates strong selling pressure. This means that ETH/BTC may decline further in the coming weeks.
"Ethereum is dying a slow death," commented Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital.
Factors Contributing to Ethereum’s Decline
In 2024, ETH/BTC has underperformed largely due to several factors:
- Launch of spot Bitcoin exchange-traded funds (ETF) in the United States: The introduction of these ETFs increased BTC’s appeal among retail and institutional investors. As a result, capital shifted away from Ethereum and into Bitcoin.
- Underperformance of Ethereum’s own spot ETF: This further exacerbated the decline in ETH/BTC.
- Growing adoption of Solana (SOL): SOL/ETH has surged by over 925% since December 2022, indicating growing popularity of Solana as a smart contracts rival to Ethereum.
- Missed opportunity during the Donald Trump election campaign: During this period, there were rumors that Bitcoin could be made a strategic reserve asset in the US. However, Ethereum was ignored, which contributed to its decline.
Ethereum’s Crypto Market Dominance at an All-Time Low
Ethereum’s crypto market dominance (ETH.D) is now at its lowest since April 2021. This indicates a significant shift in investor sentiment away from Ethereum and towards other cryptocurrencies.
ETH Price Could Drop Another 50%
Technical analysis suggests that ETH/BTC is entering the breakdown stage of its prevailing inverse cup-and-handle (IC&H) pattern. This pattern indicates a strong downtrend, with potential for prices to drop by as much as the distance between the cup’s peak and neckline.
Breakdown Scenario: Downside Target of 0.017 BTC
Applying the breakdown scenario in ETH/BTC’s case brings the downside target for 2024 to 0.017 BTC, a key support level from the August 2019-January 2020 period. This represents a potential decline of around 50% from today’s prices.
Strong Rebound Scenario: Potential Upside Target of 0.043 BTC
Conversely, if ETH/BTC were to experience a strong rebound from its current support level of around 0.0317 BTC—coinciding with the 0.786 Fib line—it could invalidate the IC&H pattern. In this scenario, prices may rise towards 0.043 BTC by 2024’s end.
Note: 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.
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