The native cryptocurrency of the Ethereum blockchain, Ethereum (ETH), has slumped to its lowest level against Bitcoin (BTC) since May 2020. On March 13, the ETH/BTC trading pair fell over 1.50% to reach 0.022—a continuation of a prolonged bearish trend that has seen Ethereum lose significant ground relative to the market leader.
This decline represents an 85% drop from Ethereum’s all-time high of 0.156 BTC reached in June 2017. Once seen as the most likely contender to challenge Bitcoin’s dominance, Ethereum now faces mounting technical and fundamental headwinds that are reshaping investor sentiment.
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Technical Indicators Signal Deepening Weakness
Technical analysis paints a grim picture for Ethereum’s short-term outlook. On the two-week chart, Ethereum’s Relative Strength Index (RSI) has plunged to 23.32, a level not seen in years and well below the 30 threshold typically associated with oversold conditions. While oversold readings can sometimes precede rebounds, sustained weakness at this level suggests prolonged selling pressure and waning market confidence.
Crypto analyst Alessandro Ottaviani described the current environment as a classic "falling knife" scenario—a term used to warn investors against catching a rapidly declining asset too early.
“A falling knife means that trying to buy at what appears to be a bottom can lead to further losses if the downtrend remains intact,” Ottaviani explained.
Traders hoping for a reversal are now focusing on signs of stabilization in the RSI and a successful reclaim of key resistance levels. The immediate target for any meaningful recovery would be a breakout above the current 0.022 BTC level—the same zone that acted as strong support in December 2020 and preceded a 300% rally in ETH/BTC value.
If momentum builds, technical models suggest the pair could climb toward the 0.382 Fibonacci retracement level at approximately 0.038 BTC, which also aligns with the 50-week exponential moving average. However, such a move would require a significant shift in market dynamics and renewed capital inflows into Ethereum.
Key Support Levels Under Pressure
Before any rebound can materialize, Ethereum may face additional downside pressure. Analysts have identified a potential support zone between 0.020 and 0.016 BTC. The lower end of this range would represent a further 30% drop from current levels, underscoring the risks facing ETH holders.
Should this zone fail to hold, there are few clear technical buffers below it—raising concerns about a deeper capitulation phase. In such scenarios, fear-driven selling often outpaces fundamental valuation, especially in markets with high leverage and low liquidity.
Competitive Pressure From Emerging Blockchains
Ethereum’s weakening position isn’t solely due to technical factors. The network is facing intensified competition from alternative blockchains, particularly Solana (SOL). According to data from investment firm VanEck, Solana has surpassed Ethereum in decentralized exchange (DEX) trading volume—even amid a broader decline in memecoin activity.
More telling is the divergence in momentum: while Solana’s transaction volume has been steadily rising over recent months, Ethereum’s has trended downward. This shift reflects growing user migration toward faster, lower-cost networks, especially for retail trading and DeFi interactions.
Although Ethereum remains dominant in total value locked (TVL) and developer activity, its first-mover advantage is eroding. Networks like Solana, Avalanche, and Base are capturing market share by offering improved scalability and user experience—key factors in driving adoption during bear markets.
The Bitcoin ETF Effect: A New Market Cycle
One of the most transformative developments affecting Ethereum’s relative performance is the launch of spot Bitcoin ETFs in early 2024. These products attracted over $129 billion in inflows, fundamentally altering the traditional crypto market cycle.
Historically, after Bitcoin’s halving events, capital would rotate into altcoins—triggering what traders call “alt season,” where assets like Ethereum outperform BTC. However, this time, institutional demand has remained heavily concentrated in Bitcoin, starving alternative cryptocurrencies of much-needed liquidity.
As a result, even strong fundamentals within the Ethereum ecosystem—such as growing Layer-2 adoption and steady protocol revenue—have failed to translate into price strength. The market is prioritizing safety and recognition over innovation and yield.
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Ethereum-Specific Selling Pressures
Beyond macro trends, Ethereum has also faced unique sources of selling pressure. One notable event was the recent Bybit hack, which led to the liquidation of large ETH holdings. Some of these funds were reportedly laundered through decentralized cross-chain platforms like Thorchain, prolonging their impact on market sentiment.
Such events trigger cascading effects: liquidations increase sell-side volume, depress prices, trigger more margin calls, and further destabilize confidence—especially in already fragile markets.
Additionally, ongoing staking unlocks and exchange inflows suggest that some long-term holders may be taking profits or reallocating capital—adding structural pressure to ETH’s price.
Can Ethereum Reclaim Its Momentum?
For ETH/BTC to reverse course, several conditions must align:
- A sustained stabilization in Bitcoin’s price to reduce overall market volatility.
- Renewed institutional or retail interest in Ethereum-based ecosystems (e.g., DeFi, NFTs, Layer-2s).
- A breakdown in Bitcoin’s dominance due to profit-taking or sector rotation.
- Positive regulatory clarity around Ethereum’s status as a commodity rather than a security.
Until then, most market observers expect the bearish trend to persist in the near term, with ETH/BTC potentially testing lower support levels before any sustainable recovery takes shape.
Frequently Asked Questions (FAQ)
Q: What does "ETH/BTC" mean?
A: ETH/BTC is a trading pair that shows how much Bitcoin one Ethereum token is worth. A falling ETH/BTC ratio means Ethereum is losing value relative to Bitcoin.
Q: Why is Ethereum underperforming Bitcoin?
A: Multiple factors: spot Bitcoin ETFs have drawn institutional capital away from altcoins; rising competition from faster blockchains like Solana; and internal selling pressures from hacks and liquidations.
Q: Is Ethereum dead as an investment?
A: Not necessarily. Despite price weakness, Ethereum maintains strong fundamentals—active development, high TVL, and leadership in smart contracts. However, short-term performance depends on broader market sentiment and capital flows.
Q: What is a "falling knife" in trading?
A: It refers to an asset experiencing rapid price declines. Traders use the phrase to caution against buying too early, as further drops may occur before a true bottom forms.
Q: Could ETH/BTC ever recover its 2017 highs?
A: While possible long-term, it would require a major shift in market structure—such as another altcoin season driven by innovation cycles or regulatory tailwinds for Ethereum-based applications.
Q: Where should traders watch for signs of recovery?
A: Key levels include a stable RSI above 30, a close above 0.022 BTC resistance, and increasing on-chain activity or exchange outflows signaling accumulation.
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Conclusion
Ethereum’s 85% decline in value relative to Bitcoin since 2017 marks one of the most significant underperformances in its history. While technical indicators remain bearish and competitive pressures mount, the network's foundational strengths suggest it may still play a central role in the future of decentralized applications.
However, for investors seeking relative gains against Bitcoin, patience will be required. Until macro conditions shift and capital begins rotating back into altcoins, Ethereum may remain trapped in its "falling knife" phase—best observed rather than rushed into.
Core Keywords: Ethereum, Bitcoin, ETH/BTC, falling knife, crypto market cycle, Solana competition, spot Bitcoin ETFs, technical analysis