This article is also available in Spanish.
The Ethereum-Bitcoin (ETH/BTC) trading pair today dropped below 0.04, a level last seen in April 2021. The drop in the Ethereum/Bitcoin ratio could have multiple implications for the broader altcoin market.
Altcoins may suffer as Ethereum weakens
One of the key indicators of altcoin market resilience is the ETH/BTC ratio. The ratio essentially tracks the relative strength of the price of Ethereum versus Bitcoin, and is widely viewed as a gauge that can indicate potential future price movements for altcoins.
As of September 16, 2024, the ETH/BTC ratio is at 0.039, a level it last touched 3 years ago in April 2021. In fact, after hitting a high of 0.088 in December 2021, the ETH/BTC ratio has been in a long-term decline, barring the occasional dead cat bounce, before eroding further in value.
Related reading
In terms of altcoin price action, a high ETH/BTC ratio suggests that Ethereum is performing well against Bitcoin. Conversely, a low ratio suggests that Bitcoin is outperforming Ethereum and other altcoins, which could lead to a shift in confidence away from Ethereum and toward Bitcoin.
As a result, the broader cryptocurrency market could see a sell-off in altcoins as capital seeks out more stable and better performing assets.
Currently, Bitcoin (BTC.D) dominance stands at 57.78%, and it can be seen that the metric has been in a steady upward trend since November 2022. The increase in BTC.D reinforces the weakness of the altcoin market, indicating that liquidity is exiting small-cap tokens, which could lead to volatile price movements and rapid price drops.
It is worth noting that the US Securities and Exchange Commission (SEC) has approved Ethereum exchange-traded funds (ETFs) He didn’t do it. This event was certainly as important for the price of ETH as it was for the price of BTC.
Data Data from cryptocurrency ETF tracker SoSoValue indicates that cumulative net outflows for US Ethereum ETFs amounted to $581 million, while net inflows for US Bitcoin ETFs amounted to $17.3 billion.
Can Ethereum price change momentum?
Ethereum is trading at $2,282, a price level it last touched in January 2024. Notably, the second-largest cryptocurrency by market cap briefly touched the $3,900 mark, before losing all its gains.
Recently, it was Reported 112,000 ETH were transferred to cryptocurrency exchanges in a single day, suggesting that investors may not be too keen on holding ETH while its price weakens compared to Bitcoin.
Related reading
Some experts express his opinion Now may be a good time to convert BTC holdings to ETH as they see a potential 180% spike in the affected ETH/BTC ratio.
The continued selling pressure on Ethereum has also pushed Ethereum into oversold territory, giving Hope For ETH holders, the digital asset has hit bottom and may soon see a strong price recovery.
Featured image from Unsplash, charts from Tradingview.com
Comments are closed, but trackbacks and pingbacks are open.