Ether (ETH) has seen a decline in performance compared to Bitcoin and the wider cryptocurrency market in recent weeks, causing traders to question whether its downward trend is coming to an end. While Bitcoin’s price fell by 18% and the total cryptocurrency market capitalization dropped by 16%, Ether has underperformed, leading to concerns of a deeper correction before a sustained recovery.
One indicator of Ether’s underperformance is the ETH/BTC ratio, which has been declining throughout March and reached its lowest point since January. In March, Ether has seen an 8% increase in price, but it has lagged behind Bitcoin and other top layer 1 tokens such as BNB and SOL, which have rallied 44% and 76% respectively.
There are several reasons for Ether’s underperformance. Bitcoin-specific factors, such as the success of U.S. spot Bitcoin ETFs since their approval by the Securities and Exchange Commission in January, have contributed to Bitcoin’s strong performance. Additionally, the upcoming Bitcoin supply halving, which has historically led to a parabolic uptrend in crypto prices, has further boosted Bitcoin’s performance. Furthermore, Ethereum’s network activity has declined in specific metrics over the past week, with a decrease in daily active addresses.
While Ethereum remains a dominant player in the layer 1 sector, Solana has recently captured market share in terms of on-chain activity and stablecoin transfer volume.
Ether’s attempt at recovery has been met with resistance at the $3,600 level, indicating a stubborn barrier in its path. This resistance zone is backed by data from IntoTheBlock, which shows that a significant number of addresses bought Ether within the $3,534 and $3,639 price range. If this resistance level sees high selling activity, Ether’s price is expected to decline further.
A bear flag pattern can be seen on the daily chart, suggesting a continuation of the downtrend. Ether bulls are hoping for support at the lower boundary of the flag, around $3,497. A daily close below this level would indicate a bearish breakout and potentially lead to a 26% decline to $3,060.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.