The recent performance of Ethereum has closely followed that of Bitcoin, with both experiencing a downtrend in prices. However, upon closer inspection, it becomes apparent that Ethereum may have more bearish fundamentals compared to Bitcoin. This has led crypto analysts to speculate that the second-largest cryptocurrency by market cap could see further declines in the near future.
One crypto analyst, Shin Forex, recently shared an analysis of the Ethereum price on the TradingView website. The analysis focused on the ETH/BTC chart and revealed some troubling developments. According to the analyst, liquidity in Ethereum has been decreasing, with investors shifting their focus towards Bitcoin instead of altcoins like ETH. This shift in liquidity indicates a growing disinterest in Ethereum and leaves the cryptocurrency vulnerable without the support it needs to maintain its price.
Break Below Support Levels
Another concerning factor highlighted by the analyst is the ETH/BTC pair breaking below its support level of 0.05. History shows that each time this support level has been breached in the past, a significant price crash has followed before any potential recovery. Based on this pattern, Shin Forex predicts that the ETH/BTC pair could fall below 0.04, causing Ethereum prices to spiral downward with a projected target of $2,500.
In the short term, the outlook for Ethereum appears grim, with the altcoin currently trending downwards within its current channel. According to the analyst, bears are in control of the market and have successfully pushed Ethereum’s price below $3,000. At the time of writing, Ethereum is trading at $2,975 with a minor 0.36% decline in the last 24 hours, as reported by Coinmarketcap.
Despite the current bearish sentiment surrounding Ethereum, there is still hope for a recovery based on historical trends. Looking back at previous market cycles, there have been instances where Ethereum experienced a crash followed by a substantial rally. In both 2016 and 2019, the price of ETH/BTC fell before eventually reaching new all-time highs. If this pattern holds true, we could see a similar recovery after the current downturn.
The future of Ethereum remains uncertain as it faces multiple challenges in the current market environment. While the short-term outlook may not be optimistic, there is a possibility for a recovery based on past trends. Investors and traders should monitor the developments closely and stay informed about any potential shifts in the market that could impact the price of Ethereum.