Ethereum’s native token, Ether (ETH), recently fell below its longest-standing support level for Bitcoin (BTC), leading top analysts to conclude that Ethereum is “slowly dying.”
Ether broke support that once triggered an 1,800% rally.
Notably, the ETH/BTC pair fell below the uptrend support line, which coincides with the market bottom since 2016.
This includes the pair’s 300% rebound from December 2020 to December 2021 and the 1,800% recovery between January 2017 and May 2017.
This is the ETH/BTC 6-week performance chart. Source: TradingView
However, in November 2024, the Ethereum bulls were unable to defend the support, with ETH/BTC falling about 15% below it with increasing trading volume.
According to technical analysis, lower support levels, especially amidst increasing trading activity, indicate strong selling pressure, meaning ETH/BTC could fall further in the coming weeks.
“Ethereum is slowly dying,” said Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital.
Source: X.com/@TuurDemeester
In particular, ETH/BTC underperformed significantly in 2024 due to the launch of the U.S. spot Bitcoin exchange-traded fund (ETF) and the poor performance of its own spot Ethereum ETF.
This, combined with Bitcoin’s fourth halving in April, has increased BTC’s attractiveness among retail and institutional investors, resulting in a shift of capital from Ethereum to Bitcoin.
Ethereum has also suffered from the growing adoption of its top smart contract competitor, Solana (SOL). For example, SOL/ETH has surged more than 925% since December 2022.
SOL/ETH weekly price chart. Source: TradingView
Ethereum also missed major headlines during Donald Trump’s election campaign, where he toyed with the idea of ignoring Ethereum and making Bitcoin a strategic reserve asset for the United States.
These factors have led to a significant decline in Ethereum’s dominance in the cryptocurrency market (ETH.D), currently at its lowest level since April 2021.
ETH.D weekly performance chart. Source: TradingView
ETH price could fall another 50%.
Chart technology shows that ETH/BTC is entering the breakdown phase of the typical inverted cup handle (IC&H) pattern.
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This pattern is identified by a round top indicating a loss of momentum in an uptrend, followed by a small upward sideways move indicating a temporary sideways move or sideways move before resuming the downtrend.
ETH/BTC weekly price chart. Source: TradingView
The IC&H pattern resolves when the price falls below the general neckline support and the distance between the high point of the cup and the neckline.
For ETH/BTC, applying this analysis scenario, the downside target for 2024 would be 0.017 BTC, the key support level from August 2019 to January 2020. The price is 50% lower than the current price.
Conversely, a strong bounce from the current support level of around 0.0317 BTC, which coincides with the 0.786 Fib line, could invalidate the IC&H pattern and send the pair to the next 0.043 BTC by the end of 2024.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.