The cryptocurrency landscape is witnessing a significant transformation as Ethereum price experiences a sharp decline against both the US dollar and Bitcoin. Recent trading data indicates that Ethereum’s linear weekly futures have entered backwardation, a term that reflects a bearish sentiment in the market. This downturn sees Ethereum (ETH) plummeting to 0.023 BTC, marking its lowest level since May 2020, and representing a stark 74% drop from its pandemic high.
Moreover, Ethereum’s dollar value has dipped to $1,770, a significant 57% decline from its highest point in December last year. The combination of various adverse market conditions, including ongoing exchange-traded fund (ETF) outflows and increased competition from emerging layer-1 and layer-2 networks, has exacerbated Ethereum’s woes. Analysts emphasize that Ethereum is no longer perceived as the most lucrative asset in the cryptocurrency sector, impacting investor confidence.
In a report from a notable derivatives trading expert, it was revealed that ETH’s futures market has now entered backwardation for the first time since August of last year. This denotes that the futures price is now less than the current spot price, suggesting that market participants anticipate further declines. Conversely, Bitcoin’s futures remain in contango, indicating a more favorable outlook for BTC amidst the prevailing market uncertainty.
The visual representation of the ETH/BTC price chart further underscores this downward movement, showing Ethereum consistently below its moving averages—a clear signal that bearish forces dominate the market. As Ethereum approaches critical support levels around $0.02350, many traders are watching closely for potential breakdowns that could lead to targets as low as $0.0173, reflecting the lows seen in December 2019.
Ultimately, while Ethereum faces severe short-term challenges and sentiment continues to shift bearish, market analysts caution that a reversal is not impossible. With strong indicators like the Average Directional Index (ADX) reaching 38 and both the Relative Strength Index (RSI) and Stochastic Oscillator indicating oversold conditions, traders must stay vigilant in navigating a volatile cryptocurrency market.
