Insights: ETH Price Correction Continues

Ether (ETH) has been underperforming compared to Bitcoin and the broader cryptocurrency market, raising concerns about its downtrend. While Bitcoin’s price fell by 18% in the last month, ETH has struggled to maintain its momentum. Market indicators suggest that ETH might experience a deeper correction before bouncing back. The ETH/BTC ratio has been trending lower, and while ETH is up 8% in March, it has lagged behind Bitcoin and other top layer 1 tokens. Bitcoin’s price has rallied 21% in the past 30 days, while tokens like BNB and SOL have seen even more significant gains.

Several factors explain ETH’s underperformance. The success of U.S. spot Bitcoin ETFs, approved by the SEC in January, has provided a boost to Bitcoin. The upcoming Bitcoin supply halving, which historically triggers price increases, has added to BTC’s tailwinds. Ethereum’s network activity has recently declined, with a drop in daily active addresses. Solana has also captured market share from Ethereum in terms of on-chain activity and stablecoin transfer volume.

Ether has faced strong resistance in its attempted recovery, particularly at the $3,600 level. Data from IntoTheBlock highlights that a significant number of addresses previously purchased ETH in the price range of $3,534 to $3,639, creating a barrier for further upside movement. If sellers continue to dominate this resistance level, ETH’s price is likely to decline further.

The daily chart shows a bear flag pattern, indicating the continuation of the downtrend for ETH. The current price of $3,511 is still below the recent high of $4,093. Bulls are hoping for support from the lower boundary of the flag at $3,497, as a close below this level could signal a bearish breakout and a potential decline to $3,060. The relative strength index (RSI) hovering around 50 also suggests increased selling pressure.

Ether’s underperformance compared to Bitcoin and other cryptocurrencies has raised doubts about its downtrend. Various factors, including the success of Bitcoin ETFs, the upcoming supply halving, and a decline in Ethereum’s network activity, have contributed to this situation. ETH has faced resistance at the $3,600 level, and the presence of a bear flag on the daily chart suggests a continuation of the downtrend.

Celinka Lujan

Celinka Lujan

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