Ethereum-to-Bitcoin Ratio Reaches Three-Year Low: What to Expect from ETH Price Next?

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Ether’s price hovers around a three-year low against Bitcoin, lagging behind BTC’s 2024 performance. ETH is only 0.015% above its Jan. 1 level, while Bitcoin has soared by about 37% this year. As Ethereum is now at its weakest level against Bitcoin, investors might switch their focus toward Bitcoin. This might plunge the buying demand for Ethereum in the coming hours, creating a negative volatility in the price chart.

Bitcoin Outperforms Ethereum With Robust Metrics

Ether has declined by 12.5% in the past 30 days, while Bitcoin has only fallen by 2% during the same period. Additionally, the ETH/BTC ratio has decreased by about 24% over the last three months, hitting a three-year low of 0.0387 on September 16.

The drop in the ETH/BTC ratio reflects weaker demand for Ether, as investors are showing a preference for Bitcoin over ETH.

To provide some context, U.S. spot Bitcoin ETFs have seen greater success since their approval by the Securities and Exchange Commission (SEC) on January 10, compared to spot Ethereum ETFs.

According to on-chain data provider Glassnode, these investment products have had a smaller influence on Ether’s price (1% of spot volume) compared to their impact on Bitcoin, which stands at 8%.

Alongside Ether’s bearish performance against Bitcoin, ETH has been further affected by the steady increase in Bitcoin dominance. Bitcoin’s market dominance continued to rise in 2024, hitting a 40-month high of 58% on August 5. This trend suggests that the leading cryptocurrency is gaining strength against altcoins, including Ether.

Also read: Ethereum Price Analysis: Will ETH Price Reclaim $2,400 This Week?

DAppRadar data shows that active addresses for Ethereum DApps have also dropped by 20% in the past 30 days. This decline is concerning, especially as competing blockchains like Solana and Tron experienced a 257% and 343% increase in total UAWs during the same period.

As Bitcoin dominance continues to climb, ETH’s value against its BTC pair is likely to keep declining. This indicates that investors are more bullish on Bitcoin and may be allocating less capital to Ether.

What’s Next For ETH Price?

Ether bulls managed to push the price above $2,300, but the relief rally is encountering resistance near the 20-day EMA ($2,351). As a result, the price is facing bearish volatility below $2,300. As of writing, ETH price trades at $2,288, declining over 4.7% in the last 24 hours.

If the price stays below $2,300, it would indicate that bears have the upper hand, potentially dragging the ETH/USDT pair down to $2,100. Buyers may attempt to halt the decline at $2,100, but if that level fails, the pair could drop to the psychological support of $2,000.

For buyers to regain control, they need to drive and maintain the price above the 20-day EMA. This could send the pair towards the 50-day SMA ($2,555) and eventually to the breakdown level of $2,771.