Ethereum (ETH) Has Bottomed vs. Bitcoin (BTC), Says Benjawin Cowen

Key Takeaways

• The Ethereum (ETH) to Bitcoin (BTC) rate fell to the lowest level in 1,253 days.
• It has reached a long-term ascending support trend line existing since 2015.
• Will the ETH/BTC ratio bounce, or will it continue its steady decline instead?

The Ethereum (ETH) price has underperformed against Bitcoin (BTC) in 2022 and 2023, falling by 9% and 25%, respectively. The decline is even more pronounced in 2024, with ETH/BTC falling 30%.

Let’s examine the movement of the ETH price relative to BTC and see if any signs suggest this decline will be over.

Benjamin Cowen Predicts Bottom

The social sentiment regarding ETH is depressed because of its underperformance this year. Due to the ongoing decline, even fading cryptocurrencies like Bitcoin Cash (BCH) have outperformed  it this year.

However, well-known crypto analyst Benjamin Cowen believes  the ETH to BTC ratio will bottom this year. He suggests it will bottom somewhere between ₿0.03 and ₿0.04.

Previously, Cowen perfectly predicted  the downward movement that accelerated in June 2023.

Another trading analyst, Master Kenobi, suggests the ETH to BTC decline mirrors past cycles since the ratio fell after the Bitcoin halving . However, ETH and altcoins started to rally roughly 150 days after halving in past cycles, which would suggest an upcoming rally.

Eliz883 also suggests  the ongoing decline is simply a deviation below the range low, which will mark the local bottom.

One narrative that can help ETH perform better is the upcoming Pectra upgrade, which could be the biggest yet . This upgrade will improve Ethereum’s efficiency and scalability.

Because of its sheer size and scope, developers are discussing whether to split the upgrade , launching the first phase in Q1 2025.

Pectra is the first major upgrade since Dencun, which greatly reduced transaction fees for Layer-2 solutions, but made ETH inflationary again. 

Considering that, let’s look at the price action and see what may happen.

Ethereum Reaches Support

The two-week chart for ETH shows a downward trend for over 1,000 days. Today, the ETH price fell to a low of ₿0.039, the lowest since 2021. The two-week Relative Strength Index (RSI) also fell to an all-time low of 32.

While the Ethereum price trades above support and is extremely oversold, no signs indicate an imminent trend reversal.

The daily time frame is more bullish since it shows a double bullish divergence (green), present in both the RSI and MACD. The previous time such a divergence happened was in November 2023, leading to a 27% increase. A similar increase would take ETH/BTC to the long-term resistance at ₿0.049.

Since the divergence is only present in the daily time frame, it is unclear if it will lead to a long-term trend reversal or merely a relief rally.

Besides the divergence, there is a completed five-wave decline where wave five was a descending wedge. This further enhances the likelihood of a short-term bounce.

Bitcoin Dominance Could Top

While the ETH/BTC chart gives mixed signs, the Bitcoin Dominance Rate (BTCD) is likely to reach its top soon. The indicator has increased since June 2022 in what is likely a five-wave upward movement (white).

If so, it is currently in the fifth and final wave, which has developed into an ascending wedge, considered a bearish pattern. The sub-wave count is in black.

On top of this, the weekly RSI and MACD have both generated clear bearish divergence (green), a sign of an impending decline.

The fact that the divergence happens inside the 0.5-0.618 Fibonacci resistance levels further increases its legitimacy.

So, it is possible that Bitcoin’s dominance has reached its top or will do so soon, beginning a lengthy downward movement.

Long-Term Trend Unclear

The ETH/BTC chart does not clearly indicate that the bottom is in. However, Bitcoin’s Dominance could reach a top soon because of its bearish price action and indicator readings. Since Ethereum is the largest altcoin, a fall in BTCD will likely mean that ETH will outperform Bitcoin in the near future.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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