Ether traders are getting nervous as ETH/BTC pair extends losses to hit 3 year low. ETH/BTC is at 0.035 as of November 5, last seen in March 2021. As this keeps falling, everything is getting tense as Ethereum is more resilient to Bitcoin after recent events.
ETH/BTC is showing how far behind Ethereum is to Bitcoin’s price action. Alex Thorn, head of research at Galaxy, said in a post on November 5 that the pair hit a new multi year low. Now that Ethereum is underperforming against Bitcoin, traders are looking for what’s next for Ethereum in a very crowded crypto space.
Analysts Skeptical of an Immediate Rebound for ETH/BTC
Crypto analysts don’t see a quick bounce for ETH/BTC, top voices are calling for more downside for the pair. Market analyst Zach Voell said “no reversal in sight” for ETH/BTC, to sum up the bearish situation Ethereum is in. ‘Colin Talks Crypto’, a crypto commentator also agrees and said the ratio will keep going down unless Ethereum can get some momentum.
While some traders are expecting more near term downside, historical data gives us a glimmer of hope. Last time ETH/BTC was this low was in March 2021, the pair rebounded big time in 2 months to 0.077 by May that year. Ether price was up 120% to $3,928 during that time. So some traders are hoping Ethereum can do the same, if market conditions line up in its favor.
Election Volatility and Ether’s Price
This is further complicated by the US presidential election. Many believe the market will be more volatile during this period, and some speculate that Bitcoin will spike in price in a few months. If that happens, ETH/BTC will go down unless Ethereum can keep up with Bitcoin’s gains.
Market analysts are already seeing early signs of this volatility. CryptoQuant contributor Amr Taha said the flow of ETH NetFlow to derivative exchanges is surging, 82,000 ETH was transferred to derivative exchanges on November 5. He showed that such big spikes can be a precursor to a drop or a period of high volatility, meaning a price correction. This adds to the uncertainty of Ethereum as traders are watching on-chain data and macroeconomic factors for the next few months.
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Bitfinex analysts also agree, the election can make “big moves” in the crypto market. According to latest reports, Bitcoin is at risk of a “much deeper correction” on the lower time frames depending on how the election will impact the overall financial landscape.
Why ETH/BTC Matters in a Volatile Market
Meanwhile, ETH/BTC ratio is still important for crypto traders providing insights as Ethereum gains strength against Bitcoin. A falling ETH/BTC ratio means Ethereum is underperforming Bitcoin and that’s a signal for traders to adjust. With Bitcoin getting more traction especially in areas of regulatory changes and institutional acceptance, Ethereum will find it hard to maintain its status quo in the whole crypto ecosystem.
One of the many challenges ahead for Ethereum is the growing competition from Layer 2 scaling solutions and other blockchain platforms whose pressure has been building up since the network is struggling with scalability issues and high transaction fees.
Ethereum’s success will depend on how well scaling solutions can be implemented. This is something that has been puzzling while the network is adapting to its new role in the digital economy. If Ethereum doesn’t address the scalability issue at hand, then Bitcoin’s dominance will be even more pronounced and that will further distort the ETH/BTC ratio.
Conclusion: ETH/BTC Outlook as Market Volatility Rises
Recent ETH/BTC lows shows how hard it is for Ethereum to navigate this crazy market. History may be on its side for a turnaround but economic and political pressure will still dampen short term recovery. The real test for traders will be the impact of the US presidential election and high market volatility. Either way, ETH/BTC ratio will be one of the indicators of Ethereum’s performance in a hard road of internal and external problems.
Ethereum is the one being watched in the crypto space as it’s being compared to Bitcoin for investor’s attention. When the market goes up and down, it’s the ETH/BTC ratio that reminds us that two digital currencies are always fighting for the top spot in the crypto world to get more wallet share.
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