3 reasons why Ethereum price is down against Bitcoin
The price of Ethereum’s native token, Ether (ETH) is trading around a 15-month low versus Bitcoin (BTC), and the lowest since Ethereum switched to proof-of-stake (PoS).
Cointelegraph takes a closer look at some of the reasons for the continuous drop of the ETH/BTC pair.
In previous market cycles, Ethereum often outperformed BTC during bullish market trends, but this relationship began to change at the start of 2023. Ether and numerous altcoins struggled as the narrative around altcoins use within Web3, DeFi and NFTs came under pressure in 2022 and 2023.
Stringent regulations against the crypto industry, severely muted inflows from retail and institutional investors, an uptick in investors seeking shelter in US-dollar-pegged stablecoins also impacted sentiment for Etheruem.
In addition to a change in Ether’s performance in its BTC pair, ETH was negatively impacted by the steady rise in Bitcoin dominance. As reported by Cointelegraph,
Bitcoin dominance is a measure of BTC’s market capitalization relative to the overall crypto market and it highlights the assets’s strength and if often used by investors as a sentiment gauge. With the Bitcoin halving fast approaching (April 2024) and investors’ belief that a spot BTC ETF is imminent, the drop in Ether’s value in its BTC pair suggests that investors feel more bullish about BTC and possibly allocating less money to Ether investments.
Related: Bitcoin dominance hits 54% — Highest in 2.5 years as BTC halving approaches
The ETH/BTC pair dropped to 0.050 BTC on Oct. 23 and has remained in a downtrend since then. A notable occurrence was the pair’s fall below its 200-week exponential moving average near 0.058 BTC,which raises the possibility for further downside in the
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