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Bitcoin’s price surged robustly towards $66K following softer-than-expected U.S. inflation data. This push has brought the crypto market close to resistance levels. However, the ETHBTC ratio has been declining sharply. Analysts see this as a sign of declining interest in Ethereum’s price as Bitcoin’s ETF hype continues to attract altcoin investors.
Negative Sentiments Impact Ethereum
The price ratio between ether (ETH) and bitcoin (BTC) continues to decline, reflecting year-to-date losses, as predicted by the bearish death cross pattern observed a month ago.
On crypto exchange Binance, the ETH/BTC ratio dropped to 0.04483 just before press time, hitting its lowest point since April 2021, as reported by charting platform TradingView. This year, the ratio has fallen by nearly 15.8%, highlighting a preference for Bitcoin.
The decline to three-year lows is due to a decreased demand for exchange-traded products (ETPs) linked to ether. Ether exchange-traded products (ETPs) saw net outflows of approximately $63 million last week, with Hong Kong-listed ETFs experiencing the most significant losses. In contrast, bitcoin ETPs gained $92 million during the same period.
ETH is likely losing popularity among investors due to several factors, including competition from other layer 1 blockchains and ongoing uncertainty about the approval of spot ETH trading in the U.S.
Also read: Ethereum Bulls To Take Over After Symmetrical Triangle Break
For example, Solana’s share of total decentralized exchange volumes has increased significantly, rising from 2% to 20% in one year, taking market share from Ethereum.
In January, the SEC approved nearly a dozen spot BTC ETFs. Since then, these funds have attracted around $12 billion in net inflows. Approval of spot ETFs linked to ether could attract a similar amount of capital for Ethereum’s native token. However, it is still uncertain when the SEC will grant approval.
Ethereum recently broke $3K and the last time it closed above $3,000 was more than six days ago. Ethereum is lagging behind Bitcoin, underperforming the leading cryptocurrency by 22% since the beginning of 2024.
What’s Next For ETH Price?
Ether’s robust rebound from the $2,900 support indicates strong defense by the bulls at this level. Despite a strong surge in BTC price, ETH failed to follow the trend and rejected the $3,050 mark. This plunged the price below the psychological $3K mark. As of writing, ETH price trades at $2,966, declining over 0.16% in the last 24 hours.
If the price moves above the descending resistance line, the ETH/USDT pair may climb to the crucial level of $3,100. Bears are expected to put up a strong defense at this resistance line, but if the bulls succeed, the pair could begin a rally towards $3,400.
Conversely, if the price declines from the 20-day EMA, it suggests bears are selling during minor rallies. This could lead to a retest of the $2,800 support. A break below this level may initiate a downward move towards the support line of the descending channel.
