For over two years now, Bitcoin has been outperforming altcoins like Ethereum and others. BTC dominance has continued to climb as a result.
However, Ethereum may be forecasting another 50% drop on the ETHBTC trading pair that could bring dominance back to pre-bubble levels.
ETHBTC Points To Dangerous Ethereum Drop Against Bitcoin
In early 2020, Ethereum vastly outperformed Bitcoin due to surging interest and buzz surrounding decentralized finance.
Talk of the 2020 launch of ETH 2.0 kept bullish momentum high enough for a record-setting nine full weeks of consecutive green candles.
Related Reading | Nearly 2% of the Ethereum Supply is Margin Long on Bitfinex, But Why?
But a doji on monthly price charts for ETHUSD suggest investors are feeling indecisive.
On the ETHBTC trading pair, things look even worse. A long-term channel has formed, as can be seen below in the pitchfork tool.
Pitchforks are broken into four distinct quadrants. The way traders utilize this tool, is by watching for a break or rejection of one of the four quadrants.
For example, if price is rejected from the lowest quadrant, it suggests that a test of one of the upper three quadrants is next.
Ethereum’s top at over 0.15 BTC on the ratio kicked off the pitchfork channel, which then fell through each quadrant, bouncing off the bottom.
Remaining bullish sentiment surrounding altcoins caused a second surge to the top of the tool, which was rejected back into the second-highest zone.
Related Reading | Doji Forming On Ethereum Monthly Hints At Investor Indecision
Since then, Ethereum has been trapped within the two middle quadrants. The altcoin made two more attempts recently to break up into the top quadrant but has been rejected twice now.
As explained earlier, rejection from the middle-top quadrant could lead to retests of the lower two quadrants.
The bottom of the lowest quadrant happens to line up well with untested support from late 2016 and early 2017 before the crypto hype bubble kicked off.
This area could act as the final bottom for ETHBTC before the smart contract-focused altcoin finally plays catch up against the first-ever cryptocurrency.
This represents another over 50% drop from current levels at 0.0225 on the ratio, to as low as 0.0075.
By comparison, Bitcoin remains down slightly over 50% from its all-time high, while Ethereum is down by 85%.
At the height of the crypto bubble, the ICO boom drove Ethereum prices to as high as $1,400 per ETH token. To revisit such highs, the top altcoin would require an over 550% return on investment to make a full recovery.
Some crypto analysts claim that Ethereum and other altcoins may never revisit all-time highs, even if Bitcoin reaches prices of $100,000 per BTC in the future.
The math adds up. If Ethereum does indeed fall to that level on the ratio, and Bitcoin did reach levels of $100,000 per BTC at the same time, each ETH token would be priced at $750. This would still represent an over 300% climb for the second-ranked crypto asset.
