Analyze the Reasons Behind the Continuous Drop
The price of Ethereum's native token, Ether (ETH), is currently trading at its lowest level against Bitcoin (BTC) since Ethereum switched to proof-of-stake (PoS). This article takes a closer look at some of the reasons behind the continuous drop of the ETH/BTC pair.
Ether's Historical Performance
In previous market cycles, Ethereum often outperformed Bitcoin during bullish trends. However, this relationship began to change in early 2023. With the rise of stringent regulations, a decrease in retail and institutional investor inflows, and investors seeking shelter in stablecoins, Ethereum's performance has suffered.
Bitcoin Dominance on the Rise
In addition to the change in Ethereum's performance, ETH has been negatively impacted by the steady rise in Bitcoin dominance. Bitcoin's market dominance has reached its highest level in the last 30 months, indicating that investors are becoming more bullish on Bitcoin and potentially allocating less money to Ether investments.
Ethereum Price Breaks Below Critical Support
The ETH/BTC pair dropped to a low of 0.050 BTC on October 23 and has remained in a downtrend since then. This drop below its 200-week exponential moving average suggests the possibility of further downside in the short-term.
Factors Affecting Ethereum's Price
The multifaceted market dynamics, investor sentiment, and regulatory environment are likely to continue impacting Ethereum's price relative to Bitcoin. These factors could remain as dominant headwinds against the ETH/BTC pair in the foreseeable future.
Disclaimer: This article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.
