Ethereum price came under intense pressure this week as its crash gained steam. The ETH/BTC pair plunged to a low of 0.0225, its lowest level since May 2020. It has plunged by over 75% from its highest level in December 2021. So, why is the Ethereum vs Bitcoin pair crashing, and what next?
Why the ETH/BTC pair is crashing
Ethereum price is plunging against the US dollar and Bitcoin as concerns about its network continues.
Recent data shows that the number of Ethereum addresses has continued falling this year as many investors remain in the sidelines.
Further numbers show that Wall Street investors are no longer interested in Ethereum. According to SoSoValue, spot Etheeum ETFs have continued to shed assets in the past few weeks. They have lost assets in the last three consecutive weeks, a trend that may continue if the trajectory accelerates.
These spot Ethereum ETFs hold $2.63 billion in assets, with the Blackrock Ethereum ETF (ETHA) having $2.4 billion. The other top Ethereum ETFs are two from Grayscal, followed by Fidelity, Bitwise, and VanEck.
One reason why these funds have had a lackluster performance is that Ethereum ETFs don’t provide staking income. As such, many investors prefer to buy Ethereum directly and then stake it through exchanges like Coinbase and Binance. Data show that staked Ethereum market cap stands at over $94 billion.
Read more: Ethereum price faces critical test: Key support at $1,440 amid bearish momentum
Ethereum price has also crashed as the network faces intense competition from the likes of Base, Arbitrum, Sui, and Berachain. These chains have continued to gain market share in industries like decentralized finance (DeFi) and gaming.
This trend has led to major changes in the crypto industry regarding revenues or fees. For a long time, Ethereum was the most profitable player in the crypto industry. Today, it has been passed by the likes of Jito, Uniswap, Tron, and Circle.
Bitcoin dominance has jumped
The ETH/BTC pair has also crashed because Bitcoin has outperformed Ethereum and other cryptocurrencies.
Bitcoin price has just dropped 23% from its highest level this year. In contrast, most altoins are down by a bigger margin. For example, Ethereum price is down by over 53% from its highest level in December last year. Other tokens like Solana, Cardano, and Hedera Hashgraph have all plunged by over 30% in the same period.
All this has led to a big increase in Bitcoin’s dominance. Data by TradngView shows that its dominance has surged to 62.25%, its highest level since March 2021. It has risen by over 60% from its lowest level in 2022.
ETH/BTC price forecast
The weekly chart shows that the ETH to BTC pair peaked at 0.088 BTC in 2021 and has now been in a strong downward trend
It has already crashed below the key support level at 0.04911, the lowest swing in June 2022.
The pair has moved below the lower side of the descending channel that started in September 2022 and ended in late last year.
ETH/BTC remains below the 50-week and 200-week Exponential Moving Averages. (EMA). It has also plunged below the key support at 0.0233, the lowest point in December 2020.
Popular oscillators like the Relative Strength Index (RSI) and the Stochastic RSI have all continued falling.
Therefore, the path of the least resistance for the pair is bearish, with the next level to watch being at 0.016, the lowest point in August 2019. This price target is about 32% below the current level. A move above the resistance at 0.03 will invalidate the bearish view.
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