Ethereum's native token, Ether, is facing significant challenges against Bitcoin. As of October 25, the ETH/BTC trading pair has fallen to 0.0365 BTC, marking its lowest level since April 2021. This decline is attributed to lackluster launches of exchange-traded funds and intensifying competition from rival blockchain Solana, which have dampened traders' enthusiasm for Ethereum in 2024.
These dynamics continue to exert downward on ETH/BTC, with technical indicators suggesting further weakness. Ether's persistent decline aligns with the breakdown phase of an inverse-cup-and-handle (IC&H) pattern, a bearish technical indicator.
This pattern began with an upward trend, forming an inverse U-shape, followed by a temporary rebound, or "handle," indicating a brief consolidation.
An IC&H pattern typically resolves when the price drops below its support, reaching a decline equal to the maximum distance between the pattern's peak and its neckline support. As of October 25, ETH/BTC has entered this breakdown phase, eyeing a downside target of approximately 0.0319 BTC, representing a further 15% drop from current levels.
However, Ethereum bulls are hopeful for a significant rebound. A potential bullish cycle versus Bitcoin could unfold after ETH/BTC reaches the IC&H pattern target, aligning with a bearish setup shared by Aksel Kibar, a market analyst. Kibar projects a decline toward 0.029 BTC, identifying it as a critical "inflection point," previously tested as support in 2021, which led to a substantial 200% rally.
Potential for a rebound is further bolstered by the ETH/BTC's monthly Relative Strength Index (RSI), which reached a historic low of 33 as of October 25. This RSI level is just above the oversold threshold of 30, suggesting the pair might be undervalued and poised for a bounce. A dip into oversold territory could trigger seller fatigue and a potential bullish reversal.
Should this reversal occur, ETH/BTC could aim for the 0.618 Fibonacci retracement level at around 0.0482 BTC. The 50-month exponential moving average near 0.0549 BTC would serve as another significant upside target.
The possibility exists for ETH/BTC to recover by 25%–50% in 2025 from current price levels. As always, this analysis is not investment advice. Trading and investing carry risks, and due diligence is essential.