In recent market developments, Ethereum’s native token, Ether (ETH), has slipped below a crucial support level against Bitcoin (BTC). This technical breakdown has led top analysts to suggest that Ethereum may be “dying a slow death.” Analysts warn that ETH could drop as much as 50% against BTC by the end of 2024, painting a bleak picture for Ethereum enthusiasts. In this article, we will explore the reasons behind this downturn, the implications for the future of ETH, and what it may mean for investors.
The technical analysis indicates that the ETH/BTC pair has broken below an ascending trendline support that has historically coincided with various market bottoms since 2016. Notably, this includes impressive rebounds such as a 300% recovery from December 2020 to December 2021 and a remarkable 1,800% jump between January 2017 and May 2017. However, with the recent dip, the scenario has sharply changed. During November 2024, Ethereum bulls were unable to defend the support level, driving a significant 15% drop in the ETH/BTC pair accompanied by rising trading volumes, signaling strong selling pressure.
Market sentiment has shifted notably in 2024, largely due to external factors revolutionizing cryptocurrency trading. The launch of spot Bitcoin exchange-traded funds (ETFs) has fueled demand for Bitcoin, drawing investor interest away from Ethereum. This, combined with the highly anticipated fourth halving of Bitcoin scheduled for April, has led to increased retail and institutional capital moving toward BTC. Moreover, the growing popularity of Ethereum’s main smart contract competitor, Solana (SOL), which has skyrocketed 925% since December 2022, adds to Ethereum’s woes.
Furthermore, missing significant headlines during pivotal political events, such as Donald Trump’s interest in positioning Bitcoin as a strategic reserve asset without mentioning Ethereum, has left ETH’s market dominance at its lowest since April 2021. Currently, Ethereum’s market dominance percentage is dwindling, indicating a concerning trend for its long-term viability.
Taking a closer look at the technical charts, ETH/BTC appears to be entering a breakdown phase characterized by an inverse cup-and-handle (IC&H) pattern. This pattern signifies the loss of momentum in the uptrend and indicates further potential decline. Based on this analysis, projections suggest that ETH/BTC could reach a low of 0.017 BTC by the end of 2024. This would represent a staggering 50% drop from current prices.
However, not all hope is lost for Ethereum. If ETH can mount a strong rebound from the current support level of approximately 0.0317 BTC, which aligns with the critical 0.786 Fib line, it may invalidate this bearish pattern and approach a target of 0.043 BTC by the end of 2024. The resilience of Ethereum in this turbulent market landscape will be determined by upcoming developments and its ability to regain investor confidence.
