The value of Ethereum, a major altcoin, has plummeted to its lowest point since March 2023, indicating a sharp decline in market confidence. This happened amid a wider market recession that was exacerbated by the day of Donald Trump’s release.
It exacerbated bearish feelings, and the ETH/BTC ratio fell to its lowest level in five years, indicating that Bitcoin is gaining relative strength against Ethereum.
The ETH/BTC ratio will fall for the first time in five years as traders flee.
Due to the decline in ETH prices, the ETH/BTC ratio has reached 0.019, about five years. This ratio measures the relative value of ETH compared to BTC. If that rises it indicates that ETH is outweighing BTC, either because Altcoin prices are growing faster or because King Coin prices are falling.
ETH/BTC ratio. Source: TradingView
Conversely, this decline suggests that the main coin, BTC, has gained strength compared to the top altcoin, ETH. Traders suggest that they are moving capital to BTC, and at this point consider it a safer or more profitable investment, despite its own price issues.
Additionally, on the daily chart, ETH’s negative chaikin money flow (CMF) confirms the sharp demand for coins. At press time, it is -0.07.
eth chaikin money flow. Source: TradingView
CMF indicators help measure the volume-weighted accumulation and distribution of assets over a set period and measure buy and sell pressure. This value below zero indicates that sales pressure is dominant.
ETH’s CMF measurements suggest that more traders are distributing (selling) coins than more traders accumulate coins. This reflects a weaker demand and is a bearish signal to the price momentum of the asset.
ETH flashes overfold signal: is the bounce back to the horizon?
The relative strength index (RSI) of ETH observed on the day chart indicates that Altcoin is currently oversold. At press, the momentum indicator is on a downtrend of 25.62.
The RSI indicator measures the market conditions for asset acquisitions and overselling. It ranges from 0 to 100. Values above 70 suggest that the asset is over-acquired and paid for a price drop, while values below 30 indicate that the asset is over-sold and may witness a rebound.
At 25.62, ETH’s RSI indicates that the coins are being sold in a very oversold. This provides an opportunity to buy. So such lows are usually followed by price rebounds.
If this happens, the ETH price could be reclaimed and returned above $1,589. If this level of support is enhanced, it could drive the value of ETH to $1,904.
ETH price analysis. Source: TradingView
However, this rebound is not guaranteed. If ETH Bears maintain control and sell continues, the coin could extend the decline and drop to $1,197.
