Originally published on: November 16, 2024
Ethereum, one of the leading cryptocurrencies, is facing a significant setback as its native token, Ether, recently fell below a crucial support level against Bitcoin. This development has sparked concerns among top analysts, with some even suggesting that Ethereum may be “dying a slow death.”
The ETH/BTC pair has broken below its long-standing trendline support, which has historically marked market bottoms for Ethereum since 2016. This trendline has been instrumental in driving significant rebounds for Ethereum, including a 300% surge in 2020-2021 and a remarkable 1,800% recovery from 2017.
However, in a surprising turn of events in November 2024, Ethereum bulls failed to defend this critical support level. As a result, ETH/BTC dropped by around 15%, accompanied by a noticeable increase in trading volumes. This downward trend, especially amidst heightened trading activity, signals strong selling pressure on Ethereum, hinting at further declines in the weeks ahead.
Notably, Ethereum’s underperformance in 2024 can be attributed to various factors, including the launch of Bitcoin exchange-traded funds (ETFs) in the US, which overshadowed Ethereum’s own ETF. Additionally, Bitcoin’s fourth halving event in April increased its appeal among investors, leading to a shift in capital from Ethereum to Bitcoin.
Furthermore, Ethereum faced stiff competition from Solana, its top smart contract rival, with SOL/ETH surging by over 925% since December 2022. The lack of attention received during the Donald Trump election campaign, where Bitcoin was proposed as a strategic reserve asset, further added to Ethereum’s woes.
Technical charts point towards a breakdown in the prevailing inverse cup-and-handle pattern for ETH/BTC. This pattern typically indicates a loss of momentum in an uptrend, followed by a downward move after breaking below a common neckline support.
While the outlook for Ethereum seems bleak, a rebound from the current support level could potentially reverse the downward trajectory for ETH/BTC. However, failure to do so might lead to a further decline of up to 50% from current prices.
In conclusion, it is essential for investors to conduct their research and due diligence before making any investment decisions, as cryptocurrency markets are highly volatile and unpredictable. Stay tuned for more updates on Ethereum and the broader crypto market trends.
