- The ETH/BTC pair has dropped significantly, suggesting weakening Ethereum demand relative to Bitcoin.
- If BTC continues to outperform, Ethereum could face further downside pressure.
Ethereum’s [ETH] valuation against Bitcoin [BTC] has plunged to a five-year low. Historically, BTC consolidation or local tops have triggered capital inflows into high-cap altcoins, fueling short-term ETH rallies.
In mid-May 2024, the ETH/BTC pair surged to a three-month high, posting daily gains exceeding 10% as BTC faced resistance at $70K.
Notably, while Bitcoin extended its decline, ETH/BTC held firm, with its 1-day chart indicating sustained capital inflows.
Source: Coinalyze
This strength translated directly into ETH’s price action.
During the same period, ETH posted its largest single-day gain, soaring 19.25% to $3,697.80, marking its longest green candlestick and confirming a surge in bullish momentum.
A similar rally followed post-election. As Bitcoin hit its historic $99K milestone, investor caution triggered capital rotation into Ethereum.
The ETH/BTC pair turned bullish, with ETH posting nearly 10% single-day gains, reclaiming $4K for the first time in nine months.
Source: TradingView (ETH/USDT)
ETH/BTC at five-year low: What It means for Ethereum’s short-term outlook?
Fast-forward five months, and the ETH/BTC pair has plunged to a five-year low, directly impacting Ethereum’s price action.
For the first time in two years, ETH has lost the critical $2,000 support zone. Panic selling was bound to follow.
Meanwhile, BTC dominance remains firmly above 60%, despite fragile market sentiment. Historically, a weakening ETH/BTC ratio has aligned with Bitcoin dominance surges.
It reinforces the ongoing capital shift toward Bitcoin over altcoins. Does this mean Ethereum’s short-term outlook will remain bearish?
As per the chart below, Ethereum’s Cost Basis Distribution (CBD) highlights key support zones based on recent accumulation trends.
Source: Glassnode
Over the past week, ETH briefly dipped below the major $1.88k cluster, but on-chain data indicates minimal engagement from addresses at this level, suggesting weak demand.
However, new accumulation has emerged at $1.9k, with 600k–700k ETH added, potentially establishing a stronger support zone.
If BTC breaks resistance, ETH could reclaim $2K, but the ETH/BTC downtrend raises concerns.
Ethereum’s historically high-risk, high-reward appeal seems to be fading during market downturns – a significant shift that could impact its long-term trajectory.
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