Ethereum-Bitcoin Ratio Breaks 0.04 Barrier: Could Altcoins Be At Risk?
17 September 2024 - 10:00AM
NEWSBTC
Today’s Ethereum-Bitcoin (ETH/BTC) trading pair slid below 0.04, a
level last seen in April 2021. The declining ETH/BTC ratio could
have multiple implications for the wider altcoin market. Altcoins
Might Suffer Due To Weak Ethereum One of the key indicators to
gauge the resiliency of the altcoin market is the ETH/BTC ratio.
The ratio essentially tracks the relative price strength of
Ethereum against Bitcoin and is widely considered a metric that
could indicate the future potential price action of altcoins. As of
September 16, 2024, the ETH/BTC ratio sits at 0.039, a level it
last touched 3 years ago in April 2021. In fact, after hitting a
high of 0.088 in December 2021, the ETH/BTC ratio has been on a
long-lasting decline, barring the occasional dead cat bounce,
before further eroding in value. Related Reading: Ethereum Price
Nosedives Over 5%, Pressure Mounts on Bulls Regarding altcoin price
action, a surging ETH/BTC ratio indicates that Ethereum is
performing well against Bitcoin. Conversely, a declining ratio
suggests that Bitcoin outperforms Ethereum and other altcoins,
which could trigger a shift in confidence away from Ethereum toward
Bitcoin. As a result, the wider crypto market might witness a
sell-off in altcoins as capital seeks more stable and
better-performing assets. Currently, Bitcoin dominance (BTC.D) sits
at 57.78%, and it can be observed that the metric has been on a
steady uptrend since November 2022. An increase in BTC.D further
solidifies a weakening altcoin market, hinting that liquidity is
exiting small-cap tokens, which might lead to volatile price action
and quick price drawdowns. It’s worth highlighting that the US
Securities and Exchange Commission’s (SEC) approval of Ethereum
exchange-traded-funds (ETFs) didn’t quite turn out to be as
significant an event for ETH price as it did for BTC. Data from
crypto ETF tracker SoSoValue shows that the cumulative net outflow
for US Ethereum ETFs is $581 million, while the net inflow for US
Bitcoin ETFs is $17.3 billion. Can Ethereum Price Change Its
Momentum? Ethereum is exchanging hands at $2,282, a price level it
last touched in January 2024. Notably, the second-largest
cryptocurrency by market cap briefly touched the $3,900 mark,
before losing all its gains. Most recently, it was reported
that 112,000 ETH was moved to crypto exchanges in one day,
suggesting that investors might not be too keen on holding ETH
while its price relative to Bitcoin weakens. Related Reading:
Ethereum (ETH) Triangle Formation Hints At A Double Bottom:
Breakout and New ATH? Some experts opine that now might be a good
time to convert BTC holdings to ETH as they see a potential 180%
surge in the battered ETH/BTC ratio. The continual selling pressure
on Ethereum has also moved ETH to oversold territory, giving hope
to ETH holders that the digital asset has likely bottomed and might
soon see a strong price recovery. Featured image from Unsplash,
Charts from Tradingview.com
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