Ethereum is showing some serious signs of struggle lately, slipping below an important support level against Bitcoin. This has led many analysts to declare that Ethereum is “dying a slow death.”
Numbers
The ETH/BTC pair broke below its long-standing ascending trendline support, which has been a reliable indicator of market bottoms since 2016.
This trendline has previously prompted impressive rebounds, including a giant 1,800% recovery between January and May 2017 and a 300% climb from December 2020 to December 2021.
But in November, Ethereum bulls just couldn’t hold the line, the ETH/BTC pair dropped about 15% below this critical support level, and trading volumes surged alongside the decline.
In technical terms, losing a support level signals strong selling pressure, suggesting that ETH/BTC might continue to slide in the coming weeks.
Tuur Demeester, founder of Bitcoin hedge fund Adamant Capital, didn’t mince words.
“Ethereum is dying a slow death.”
There is no second best?
So, what’s behind Ethereum’s struggles? For starters, 2024 has been rough for ETH/BTC due to the launch of spot Bitcoin ETFs in the U.S. while its own spot Ethereum ETF has underperformed.
With Bitcoin’s fourth halving coming up in April, BTC has become more appealing to both retail and institutional investors, leading to a capital shift away from Ethereum.
Adding to the woes, Solana, Ethereum’s top smart contract competitor has seen massive growth, with its price skyrocketing over 925% since December 2022.
Also, Ethereum missed out on some key headlines during Donald Trump’s election campaign when he hinted at making Bitcoin a strategic reserve asset while ignoring Ethereum entirely.
All these factors have contributed to a significant drop in Ethereum’s market dominance, which is now at its lowest since April 2021.
Flippening canceled?
Technical charts are painting a pretty bleak picture for ETH/BTC as it enters the breakdown stage of an inverse cup-and-handle pattern.
This pattern indicates a loss of momentum in an uptrend followed by a smaller upward consolidation before resuming a downward trend.
If this breakdown plays out as expected, analysts predict that ETH/BTC could target around 0.017 BTC by the end of 2024—about 50% lower than current prices.
That really wouldn’t be a nice Christmas gift. If Ether can rebound strongly from its current support level of around 0.0317 BTC, which aligns with the 0.786 Fibonacci line, it could hopefully invalidate this bearish pattern and push toward 0.043 BTC by year-end.
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