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Key Points
- The ETH/BTC pair has dropped significantly, indicating a weakening demand for Ethereum compared to Bitcoin.
- Ethereum’s valuation against Bitcoin has hit a five-year low, affecting its price action.
The ETH/BTC pair has seen a significant decline, indicating that Ethereum’s demand is weakening in comparison to Bitcoin.
If Bitcoin continues to outperform, it could put further downward pressure on Ethereum.
Ethereum’s Valuation Against Bitcoin
Ethereum’s valuation against Bitcoin has plummeted to a five-year low. Historically, when Bitcoin consolidates or hits local tops, it triggers capital inflows into high-cap altcoins, which in turn fuels short-term ETH rallies.
In mid-May 2024, the ETH/BTC pair surged to a three-month high, posting daily gains exceeding 10% as Bitcoin faced resistance at $70K.
Despite Bitcoin’s extended decline, the ETH/BTC pair held firm, indicating sustained capital inflows. This strength was directly reflected in Ethereum’s price action.
ETH/BTC at Five-Year Low
Fast-forward five months, and the ETH/BTC pair has plunged to a five-year low, directly impacting Ethereum’s price action.
For the first time in two years, Ethereum has lost the critical $2,000 support zone, leading to panic selling.
Bitcoin’s dominance remains firmly above 60%, despite fragile market sentiment. This aligns with historical trends where a weakening ETH/BTC ratio coincides with surges in Bitcoin dominance.
This suggests an ongoing capital shift towards Bitcoin over altcoins. The question remains, will Ethereum’s short-term outlook remain bearish?
Ethereum’s Cost Basis Distribution (CBD) highlights key support zones based on recent accumulation trends.
Despite a brief dip below the major $1.88k cluster, on-chain data indicates minimal engagement at this level, suggesting weak demand.
However, new accumulation has emerged at $1.9k, potentially establishing a stronger support zone. If Bitcoin breaks resistance, Ethereum could reclaim $2K, but the ETH/BTC downtrend raises concerns.
Ethereum’s historically high-risk, high-reward appeal seems to be fading during market downturns, a significant shift that could impact its long-term trajectory.