Ethereum’s native token, Ether (ETH), is trading at $2,550.19, continuing its downward spiral against Bitcoin (BTC), which is currently valued at $68,296. The ETH/BTC trading pair has dipped to around 0.0365 BTC, marking its lowest point since April 2021. This decline is indicative of a broader trend affecting Ethereum, driven by underwhelming exchange-traded fund (ETF) launches and intensified competition from smart contract rival Solana. As a result, traders’ appetite for Ethereum has waned significantly in 2024.
Technical Indicators Point To Further Declines
The technical landscape is not looking favorable for ETH. Analysts warn that Ether could experience an additional 15% drop in the coming months. This prediction stems from an observed breakdown in an inverse-cup-and-handle (IC&H) pattern. This pattern typically starts with an upward trend that peaks, creating a rounded top resembling an upside-down “cup.” Following this peak, there’s a smaller rebound, known as the “handle,” leading to a consolidation period that trends slightly upward or sideways.
Currently, Ethereum appears to be in the breakdown stage of this pattern, having breached its neckline support. This positions the ETH/BTC pair eyeing a downside target of approximately 0.0319 BTC, which reflects a decline of over 15% from its present levels.
Potential for a Bullish Reversal
However, not all hope is lost for Ethereum. Market experts, including chartered market technician Aksel Kibar, suggest that Ethereum could enter a new bull cycle after hitting the IC&H target. Kibar points to 0.029 BTC as a crucial “inflection point,” noting that a previous test of this support in 2021 preceded a staggering 200% rally.
The possibility of a rebound from the 0.029–0.0319 BTC range is bolstered by the pair’s monthly relative strength index (RSI), which recently dropped to a historical low of around 33—just two points above the oversold threshold of 30. A further decline could push the RSI into oversold territory for the first time ever, signaling potential seller exhaustion and a bullish reversal.
Also Read: Ethereum’s NUPL At Neutral 0.34 As Whale Addresses Drop – Sideways Price Action Ahead?
Oversold conditions are typically seen as buying opportunities, suggesting that Ether may be undervalued and primed for a bounce. If this bullish reversal materializes, the ETH/BTC pair could aim for its 0.618 Fibonacci retracement level at around 0.0482 BTC. Additionally, the 50-month exponential moving average (EMA), situated near 0.0549 BTC, would serve as another pivotal target for recovery.
What Lies Ahead for Ethereum?
In summary, while Ethereum currently faces significant headwinds against Bitcoin, technical indicators suggest the potential for recovery in the near future. Traders should remain vigilant as the ETH/BTC pair navigates this challenging landscape. If the predicted bounce occurs, ETH could see a remarkable 25%–50% increase by 2025. As the crypto market continues to evolve, Ethereum’s adaptability will be crucial in regaining its competitive edge.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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