- Ethereum price crashed to its lowest level since April 2021 against Bitcoin, dropping below 0.039 BTC
- Whales and smart money investors, including Jump Trading and the Ethereum Foundation, have been selling their Ethereum holdings
- Technical analysis suggests further downside for Ethereum against Bitcoin, with the next support level around 0.0224 BTC
Ethereum has been on a consistent downward trend against Bitcoin over the past several months. The second-largest cryptocurrency has fallen to its lowest level compared to Bitcoin since April 2021.
Ethereum Sell-Off Accelerating
Ethereum is currently trading at 0.0039 BTC, down 24% this year and 35% from its 2022 high. It has also dropped against other major cryptocurrencies like Solana, Binance Coin, and Tron. In US dollar terms, Ethereum has declined for four straight months and is now near $2,300, its lowest since February.
This sell-off appears to be driven by weak demand from institutional investors, who have largely avoided Ether ETFs. Ether ETFs have seen $581 million in net outflows and currently hold just $662 million in assets, far below Bitcoin funds. High profile investors like Vitalik Buterin and the Ethereum Foundation have also been selling ETH tokens.
Loss of Market Share
There are concerns that Ethereum is losing market share to layer-2 networks like Arbitrum, Polygon, and others that offer faster and cheaper transactions. Investors also appear to be exiting Ethereum, with large holders like Jump Trading completely liquidating their ETH holdings in recent months.
Technical Analysis and Future Outlook
From a technical perspective, Ethereum formed a triple-top pattern against Bitcoin between May 2021 and September 2021. It broke down from this pattern in May 2022. The death cross of its 50-week and 200-week moving averages in April was another bearish signal.
The Relative Strength Index recently retested oversold levels, indicating strong downward momentum. Therefore, the path of least resistance remains down, with the next support level representing a 42% drop from current prices.
Conclusion
In summary, Ethereum continues to underperform against Bitcoin as investors exit the asset and migrate to cheaper layer-2 solutions. Unless buying interest returns, technicals point to further downside for Ethereum versus Bitcoin in the months ahead.
