The price of Ethereum’s native token, Ether (ETH), is currently experiencing a 15-month low against Bitcoin (BTC). This is also the lowest point since Ethereum made the switch to proof-of-stake (PoS). Many investors and analysts are questioning whether this downtrend will continue for the remainder of 2023. In order to assess this, let’s delve deeper into the price charts and analyze the market dynamics.
The ETH/BTC pair recently dropped to as low as 0.056 BTC, breaking below its 200-week exponential moving average (EMA). The 200-week EMA has historically served as a strong support level for ETH/BTC bulls. For example, in July 2022, the pair rebounded by 75% three months after testing this support level. Conversely, in October 2020, it experienced a 25% drop after losing the same support. The fact that ETH/BTC has broken below this critical support level raises downside risks for the remainder of 2023.
Looking at the ETH/BTC weekly price chart, the next downside target appears to be around the 0.5 Fib line near 0.051 BTC, which is approximately 9.5% lower than the current price levels. On the other hand, if ETH manages to reclaim the 200-week EMA as support, it may see a rebound towards its 50-week EMA near 0.065 BTC.
Moreover, the institutional capital flow data reflects Ethereum’s ongoing weakness against Bitcoin. Bitcoin-specific investment funds have attracted $246 million in investments year-to-date (YTD), while Ethereum funds have witnessed capital outflows worth $104 million during the same period. This divergence can be attributed to the growing anticipation of a potential Bitcoin exchange-traded product (ETF) approval in the United States. Analysts predict that the launch of a spot Bitcoin ETF could attract $600 billion in investments. Additionally, the upcoming Bitcoin halving on April 24, 2024, is also contributing to Bitcoin’s dominance over the altcoin market.
Related Post
The Bitcoin halving refers to the reduction of the Bitcoin miners’ block reward from 6.25 BTC to 3.125 BTC. This event occurs approximately every four years and has historically had a bullish effect on Bitcoin’s price. The halving cuts the new supply of Bitcoin in half, creating a scarcity effect and driving up demand. Investors are anticipating a similar price increase to occur following the next halving event.
It’s important to note that this article does not provide investment advice or recommendations. Investing and trading carry inherent risks, and individuals should conduct their own research and analysis before making any investment decisions.
In conclusion, the price of Ethereum’s native token, Ether, is currently at a 15-month low against Bitcoin. The breaking of key support levels and the institutional capital flow data suggest that Ethereum may continue to weaken against Bitcoin for the remainder of 2023. However, market dynamics can change rapidly, and investors should monitor the price charts and market trends closely.
