Ethereum’s Value Hits 41-Month Low Compared to Bitcoin
Ethereum has seen a significant decline against Bitcoin, reaching its lowest point since April 2021 with a drop of more than 55% from its peak in 2021.
Ether’s downward trend has been gaining momentum, trading at 0.039 BTC, marking a 24% decrease this year and a 35% fall from its year-to-date high. This decline extends to other cryptocurrencies like Solana (SOL), Binance Coin (BNB), and Tron (TRX). In US dollar terms, Ethereum has experienced a four-month decline, currently hovering around $2,300, its lowest level since February.
The sell-off of Ethereum is attributed to a lackluster response from institutional investors, particularly their avoidance of spot ETFs. Data indicates that Ether ETFs have seen net outflows exceeding $581 million, holding assets of $6.62 billion, significantly lower than Bitcoin spot funds with over $54 billion and net inflows of $18 billion.
Recent liquidations by the Ethereum Foundation and Vitalik Buterin have also contributed to the decline. Buterin sold tokens valued at $2.2 million, while the foundation offloaded 350,000 coins.
Concerns arise over Ethereum losing market share to layer-2 networks like Base, Arbitrum, Polygon, and Blast, known for their faster speeds and lower transaction costs compared to Ethereum. Furthermore, indications suggest that prominent investors are divesting from the coin, with one investor selling nearly $10 million worth of ETH in the last 24 hours.
Jump Trading, a significant player in the crypto industry, notably liquidated its Ethereum assets, reducing its total Ether holdings from over $531 million in July to zero.
The ongoing Ether sell-off commenced following the formation of a triple-top chart pattern around the 0.088 level between May and September 2021. Subsequently, the coin broke below the pattern’s neckline at 0.049 on May 20 of this year. Additionally, a death cross pattern emerged in April as the 50-week and 200-week moving averages intersected.
The Relative Strength Index indicates a retreat and retest of the oversold level of 30, signaling strong downward momentum. Consequently, Ether’s trajectory seems poised for further decline, with the next potential support level at 0.0224, representing a 42% decrease from the current level.
