Ethereum Hits 42-Month Low Against Bitcoin — Is the Bottom Near or More Pain to Come?

Ethereum’s price continues to struggle, particularly when compared to Bitcoin, raising concerns about potential further downside for the world’s second-largest cryptocurrency.

With Bitcoin’s dominance now at 58%, the question arises: Is Ether nearing a local bottom, or will it continue losing market share to Bitcoin?

ETH/BTC Reaches New 42-Month Low

Ether’s value against Bitcoin has dropped to its lowest level in over three and a half years, a level last seen in early 2021. This decline could signal additional downside pressure for Ethereum, according to Alex Thorn, head of research at Galaxy. In a Sept. 15 post on X (formerly Twitter), Thorn noted:

“ETH/BTC just traded below 0.03 for the first time in 3.5 years (since April 2021). It’s down 53% since the Merge in September 2022. What’s stopping this trend?”

Other analysts are also concerned about Ethereum’s performance. Fred Krueger, a well-known investor and mathematician, stated that Ethereum is on the “edge of collapse” relative to Bitcoin. Krueger also pointed out that not all exchange-traded funds (ETFs) are equal, citing the divergence in inflows between Bitcoin and Ethereum ETFs.

ETF Outflows Dragging Ether Down?

One possible reason for Ether’s sluggish price action could be the significant outflows from Ether-based ETFs. As of Feb. 15, Bitcoin ETFs have captured 75% of new investment, pushing Bitcoin above the $50,000 mark.

In contrast, U.S.-based Ether ETFs have faced net outflows of $581 million since their launch. Grayscale’s Ether ETF accounted for a significant portion of these outflows, with $2.7 billion in withdrawals, according to data from Farside Investors.

Is Ether’s Bottom Finally In?

Some analysts believe Ether’s sharp correction against Bitcoin could signal the start of a recovery. Crypto trader Anbessa suggested that historical chart patterns point to a potential bottom, writing in a Sept. 16 post on X:

“ETH/BTC has thrown back to the 0.03845 BTC Fibonacci level, which could mark the bottom.”

Other investors, such as popular crypto analyst Hedgex, are also optimistic about a potential rebound. Hedgex pointed to Ethereum’s historically low relative strength index (RSI) against Bitcoin, noting that Ethereum has only been this oversold five times in its history. In each instance, a strong rally followed.

Whether Ethereum has reached its local bottom or faces further losses remains to be seen, but market participants are closely watching for signs of a turnaround.