- Ethereum’s breach of an eight-year support trendline against Bitcoin signals growing bearish sentiment and concern.
- Solana’s 925% surge since 2022 intensifies competition, eroding Ether’s dominance in the DeFi ecosystem.
- Inverse cup-and-handle pattern suggests ETH/BTC could face a 50% drop if support at 0.0317 BTC fails.
Ethereum’s native token, Ether (ETH), has lost a critical support level against Bitcoin (BTC), prompting a wave of concern among analysts and investors. For the first time in eight years, the ETH/BTC pair dropped below an upward trendline that has marked market lows since 2016.
This trendline previously supported notable recoveries, including a 300% rebound between December 2020 and December 2021 and a staggering 1,800% surge between January 2017 and May 2017. However, November 2024 brought a decisive breakdown, with ETH/BTC plunging approximately 15% below this level. The decline was accompanied by rising trading volumes, amplifying fears of intensified selling pressure.
Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital, encapsulated the sentiment, stating, “Ethereum is dying a slow death.” The sharp loss of support, coupled with increasing volumes, signals that ETH/BTC might face even deeper losses in the weeks ahead.
Solana and Bitcoin challenge Ethereum
Ethereum’s challenges aren’t solely technical. Bitcoin’s fourth halving event in April 2024 has strengthened BTC’s appeal among both retail and institutional investors, leading to a shift of capital from Ethereum into Bitcoin. Ether’s woes have been exacerbated by the meteoric rise of Solana (SOL), Ethereum’s top smart contract competitor.
Since December 2022, the SOL/ETH pair has skyrocketed by over 925%, reflecting Solana’s growing adoption and dominance in the decentralized finance (DeFi) ecosystem. This competitive pressure has eroded Ethereum’s market share, further weakening its position.
Adding to Ethereum’s decline was a political twist. During Donald Trump’s recent presidential campaign, he hinted at making Bitcoin a strategic reserve asset for the U.S. government. Ethereum was notably absent from the conversation, leaving its community disheartened and sidelined in a potentially transformative narrative for cryptocurrency adoption.
Inverse Cup-and-Handle Signals Drop
Technical Indicators Signal Bearish Outlook for Ether. The ETH/BTC pair has entered the breakdown stage of an inverse cup-and-handle (IC&H) pattern, characterized by a rounded top and a smaller upward consolidation. This bearish formation typically signals a significant price drop once the neckline support is breached.
If this pattern plays out, the ETH/BTC pair could target a level as low as 0.017 BTC by the end of 2024, marking a 50% decline from current prices. This projection aligns with a historical support zone from August 2019 to January 2020.
Despite challenges, a sense of cautious optimism remains. Should the pair rebound strongly from its current support around 0.0317 BTC—a level coinciding with the 0.786 Fibonacci retracement line—it could negate the bearish pattern. A successful bounce could propel ETH/BTC toward 0.043 BTC by the close of 2024.
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