Ethereum's Price Decline and ETH/BTC Ratio Weakness

Ethereum has experienced a significant drop of over 30% over the past month, bringing its price performance against Bitcoin (BTC) to its lowest since January 2021.

As market selling pressures escalate, Ethereum (ETH) faces the prospect of further declines, supported by key technical indicators that suggest a continued bearish sentiment.

Price Levels Drop to 2023 Marks as ETH/BTC Ratio Hits a Four-Year Low

During most of February, Ethereum fluctuated within a limited price range. However, intense sell-offs on February 25 caused it to breach the lower boundary of this range, initiating a downward trend. Currently priced at $2,089, Ethereum finds itself at levels not seen since late December 2023.

This notable decrease has adversely affected the ETH/BTC ratio, which now stands at 0.02, marking its lowest point since January 2021.

The ETH/BTC ratio is crucial in understanding Ethereum’s relative strength compared to Bitcoin, indicating how much BTC is required to acquire one ETH. A rising ratio implies ETH is outperforming BTC; conversely, a declining ratio, as seen now, indicates underperformance in the market.

Additionally, Ethereum's price drop can be attributed to an increase in its circulating supply due to a lower burn rate, compounding the already significant bearish trends.

Recent data from Ultra Sound Money indicates that 66,748.91 ETH, valued at over $140 million, has been introduced into Ethereum's circulating supply in just the past month.

The influx of additional ETH into circulation increases the overall supply available for purchase, leading to potential price declines if demand does not keep pace.

Prospects for Ethereum: Will It Drop Below $2,000?

On technical charts, ETH currently trades beneath the lower trend line of a long-term descending channel. This breach suggests a potential acceleration in selling momentum, increasing the likelihood of further price drops for ETH, which could fall below $2,000 and settle around $1,922.