Ethereum continues its prolonged decline, recently hitting its lowest price relative to Bitcoin in over four years, as the ETH/BTC pair reached a troubling low of 0.019. This marks a dramatic plunge—over 80% off its peak reached in December 2021.
Ethereum’s price has also plummeted substantially against the US dollar, sliding from its previous high of around $4,000 to below $1,500. As a result, its market capitalization’s dominance has similarly evaporated, falling approximately 67% from its 2021 peak, now approaching levels last seen in 2022.
The steady drop in Ethereum’s attractiveness began shortly after the blockchain completed its major upgrade known as The Merge in September 2022, transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. This significant upgrade was initially intended to improve Ethereum’s scalability, energy efficiency, and sustainability—much like rival blockchain networks Solana and Avalanche. Yet Ethereum’s challenges have multiplied since the upgrade.
One key development that has hampered enthusiasm for Ethereum is Wall Street’s less-than-impressive adoption of spot Ethereum ETFs. Total inflows into these ETFs have remained muted, amounting to under $2.6 billion, far below expectations. Moreover, these recent launches have managed to accumulate only around $4.9 billion in total ETF assets. Comparatively, Ethereum investment vehicles beyond ETFs still manage around $85 billion—an indication that investors continue to favor other strategies, in particular holding Bitcoin, as their preferred store-of-value investment.
Adding to Ethereum’s woes is rising internal competition from layer-2 networks like Base, Arbitrum, Polygon, and Optimism, each offering quicker and lower-cost transaction environments. According to data provided by DeFi Llama, decentralized exchanges (DEXs) built directly on Ethereum processed roughly $57.9 billion in trading volume in the last month, while layer-2 solutions handled over $35 billion, a figure significant enough to challenge Ethereum’s dominance directly.
Ethereum’s financial metrics in 2024 have further intensified concerns. Revenues from network fees, always considered a strong point historically, are now lagging behind competitors, including Tron, Solana, and Jito. This shift underscores Ethereum’s declining profitability amid a competitive array of alternative platforms.
Technical analysis echoes these bearish fundamentals. On weekly charts, Ethereum versus Bitcoin has sustained an unbroken downward momentum. A significant bearish indicator—the death cross—occurred last May when Ethereum’s 50-week moving average dropped below its 200-week average. Moreover, recent price action has formed an inverse cup-and-handle pattern, a widely recognized bearish continuation formation. Typically indicative of further downside, this pattern forecasts a potential sharp decline for ETH against Bitcoin.
Augmenting fears for Ethereum holders, the Average Directional Index (ADX), measuring trend strength, has risen sharply to 44—solidifying the bearish trajectory and hinting that robust downward momentum has yet to peak.
Given these negative pointers and the magnitude of the inverse cup-and-handle formation, technical forecasts project Ethereum could slide far deeper, potentially approaching an all-time historical low relative to Bitcoin, near the 0.0025 ETH/BTC level.
