Ethereum’s Price Trend Four Months of Declines Spark Bottoming Debate Against Bitcoin

Summary

• Ethereum Price Downtrend Continues: ETH has recorded four consecutive months of price drops (red monthly candles), signaling a persistent bearish trend not seen since the 2022 bear market, sparking debate about whether a price bottom is near.

• ETH/BTC Ratio Plummets to 5-Year Low: The ratio of ETH to BTC value hit its lowest point in five years, indicating Ethereum’s significant underperformance relative to Bitcoin, coinciding with the lowest monthly Ethereum network fees since June 2020.

• Analyst Suggests ETH/BTC Bottom Approaching: Despite bearish signals, one analyst, VentureFounder, believes the ETH/BTC ratio may be nearing a bottom within the next few weeks, predicting a potential bottom range between 0.017 and 0.022 before a possible price recovery.

Ethereum’s price has shown a sustained downward trend, marked by four consecutive months of price decreases.

Following an 18.47% drop in March, the native token of Ethereum, Ether (ETH), has now recorded a sequence of red monthly candles, a pattern not observed since the significant market downturn of 2022.

This persistent bearish market structure has led to discussions among market observers regarding whether ETH is nearing a price floor or if further price depreciation is to be expected.

ETH/BTC Ratio Reaches a Five-Year Low Point

A key indicator highlighting Ethereum’s relative weakness compared to Bitcoin is the ETH/BTC ratio.

On March 30th, this ratio fell to 0.021, its lowest level in five years.

The ETH/BTC ratio directly compares the valuation of Ether against Bitcoin and this recent drop emphasizes that Ether has underperformed Bitcoin over the last half-decade.

Notably, the ETH/BTC ratio last touched this level of 0.021 in May 2020, when Ether’s price ranged between $150 and $300.

Data from Token Terminal reveals another concerning sign: Ethereum‘s monthly transaction fees decreased to $22 million in March 20205, reaching their lowest point since June 2020.

Ethereum fees represent the expenses users incur for processing transactions on the network and are a direct reflection of network demand.

A decrease in these fees generally indicates a decline in network activity and user interest, signaling reduced utility of the Ethereum network.

Despite these bearish price trends and declining network revenue, market analyst VentureFounder suggests that an ETH/BTC bottom could be forming shortly, potentially within the coming weeks.

The analyst suggests a possible bottom range for the ratio between 0.017 and 0.022, implying a potential for further decline before a possible rebound.

VentureFounder commented, “Maybe another lower low RSI and one more push downward. Lots of similarity with the 2018-2019 Fed tightening & QE cycle, expecting the first higher high after the May FOMC when the Fed ends QT & begins QE.”

Examining Ethereum’s price history reveals a pattern: instances of three or more consecutive monthly price declines (bearish or ‘red’ candles) have often been followed by a market bottom.

Since its creation, Ether has experienced sequences of three or more red monthly candles on five separate occasions.

In each of these historical instances, the formation of these consecutive bearish months coincided with or closely preceded a short-term price bottom.

For example, historical analysis indicates that the longest run of consecutive red months occurred in 2018, spanning seven months.

Following this extended correction, Ethereum’s price subsequently surged by 83%.

Another notable example occurred in 2022. After three months of price declines, Ethereum’s price entered a period of consolidation, trading within a defined range for approximately a year.

The price low point, or ‘bottom,’ was effectively established in June 2022, which marked the third consecutive bearish monthly candle in that sequence.

Historically, data suggests a strong probability of a positive price movement for Ethereum in April.

Past performance indicates that Ethereum has a 75% chance of experiencing a ‘green’ or positive-gain month in April.

Also Read: Evidence Solidifies Ethereum’s Position as the Premier Altcoin Investment

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