Ethereum’s Stagnation Against Bitcoin Leaves Market at a Crossroads

Key Takeaways

• Ethereum has significantly underperformed Bitcoin since 2021.
• ETH is approaching a crucial support level, with a potential breakdown at risk.
• Bitcoin’s Dominance Rate (BTCD) may have reached its peak for this cycle.

The ETH/BTC chart has served as a stark reminder of Ethereum’s struggles in the current market cycle.

Ethereum (ETH) has lagged behind Bitcoin by an eye-watering 60%. Brief rallies have sparked fleeting optimism, only to be swiftly undone by subsequent retracements.

Despite numerous breakout attempts, Ethereum remains locked in a persistent downward channel, marking new lows with unsettling regularity.

As 2025 unfolds, the pivotal question looms: Can Ethereum stage a comeback and outshine Bitcoin, or is a deeper correction inevitable?

Ethereum Trends Downward

Since December 2021, Ethereum has been on a steady decline against Bitcoin, reinforcing this bearish trend with a lower high in September 2022.

Since then, ETH has remained within a descending parallel channel, a pattern typically associated with corrective moves. However, there are no clear signs of a bullish reversal to indicate a shift in trend.

As of November 2024, Ethereum is trading near a critical support zone, formed by the ₿0.036 horizontal level and the support trendline of the long-term channel.

This channel, which has persisted for 854 days, has seen ETH lose 60% of its value relative to Bitcoin. The low of ₿0.032 in December 2024 marked Ethereum’s lowest point since early 2021.

Should Ethereum break this support, it could potentially drop another 25%, reaching the next key support at ₿0.026.

Technical indicators are showing some signs of optimism. A bullish divergence in the Relative Strength Index (RSI) is evident, while the Moving Average Convergence/Divergence (MACD) has recently made a bullish crossover.

However, these signals have yet to be confirmed by price action. A rise above the ₿0.036 level would signal a potential reversal, while a breakout from the channel would solidify a bullish trend shift.

Bitcoin Dominance Tops

Bitcoin Dominance (BTCD) is showing signs of topping out, primarily influenced by Ethereum’s performance against Bitcoin.

Despite Ethereum’s underwhelming outlook, the BTCD chart signals potential weakness. A completed five-wave increase (white) in the wave count culminated in an ending diagonal, marked by the sub-wave count (black) and the ascending wedge formation.

The 61.53% peak (black icon) aligns with the 0.618 Fibonacci retracement resistance, which coincided with a series of three bearish weekly candlesticks. If the decline continues, BTCD could fall to the next significant support at 51%.

Technical indicators further support the bearish outlook.

Both the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) show bearish divergences (green), with the MACD recently making a bearish cross (black circle). A drop below the 0 level in the MACD, a level it hasn’t breached since early 2023, would solidify the bearish trend.

Ethereum Could Continue Struggling

Even though Ethereum does not show any clear bullish signs against Bitcoin, the latter’s dominance rate may have topped. This could mean that the ETH/BTC pair will begin an upward movement, but it could also suggest that other altcoins will outperform while ETH remains stagnant.