Ether, the second largest cryptocurrency, has experienced a significant decline of more than 20% against Bitcoin in the past six weeks. The ETHBTC ratio has remained near a two-month low, with sellers pushing to stabilize the price below $3,400. This downward pressure has resulted in a notable drop in an important on-chain metric, indicating the potential for further price declines.
Ethereum’s price has been met with a mix of reactions in the market as both buyers and sellers face liquidations. Coinglass reported $35 million in liquidations over the past 24 hours, with $14 million from buyers and $21 million from sellers.
Data from IntoTheBlock shows a decreasing volatility for Ethereum over the last 30 days, currently standing at 42.6%. While lower volatility could be seen as a negative sign, indicating less trading activity, it could also reduce the chances of the price surpassing key resistance levels.
At present, the ETH/BTC ratio stands at 0.03194 according to TradingView data, marking a 19% decrease since December 5. However, in the previous bull market cycle, the ratio hit a low of around 0.03 in March 2021 before climbing to 0.077 within two months, leading to a 110% increase in Ether’s price to $3,817.
As Bitcoin’s adoption continues to grow, being bearish on Ethereum may prove to be a mistake. Some experts believe that Ethereum could indirectly benefit from Bitcoin’s wider adoption. Thomas Fahrer, co-founder of Apollo, suggested that if a Strategic Bitcoin Reserve is implemented, driving Bitcoin’s price to $1 million, it could have a positive impact on Ether, potentially reaching a price target of $4,000.
Looking ahead, Ethereum’s price is currently trading at $3,343, with buyers facing resistance around the declining resistance line. The ETH/USDT trading pair is hovering just below $3,430, presenting a significant hurdle. Maintaining above this level could drive the price towards $3,730 and possibly even $4,000.
On the other hand, a drop below the EMA20 trend line on the 1-hour chart could see the price fall to around $3,200. However, the Relative Strength Index (RSI) at 52 indicates continued buying interest, suggesting a potential uptick in the near future.