The Ethereum ecosystem is facing mounting pressure as technical indicators, on-chain metrics, and market sentiment converge to paint a bearish picture for the ETH/BTC trading pair. Despite periodic rebounds, Ethereum’s native token, ether (ETH), continues to struggle against bitcoin (BTC), with analysts warning of further downside that could persist through late 2025.
This prolonged underperformance isn't just a short-term blip—it reflects deeper structural weaknesses in demand, network activity, and investor confidence. Multiple data points suggest that ETH may still be far from finding a sustainable bottom in its valuation relative to BTC.
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Ethereum’s Repeated Breakdowns Signal More Downside
One of the most telling signs of weakness lies in the 3-day Relative Strength Index (RSI) for ETH/BTC, which remains below 30—officially in oversold territory. While oversold conditions often precede rebounds, historical patterns show that such readings have repeatedly failed to mark lasting bottoms.
Instead, each time the RSI dipped below 30 in recent months, price action followed with another leg lower. This recurring pattern underscores persistent bearish momentum and a lack of strong buying interest at current levels.
Since mid-2024, the ETH/BTC pair has experienced a series of sharp breakdowns—dropping approximately 13%, 21%, 25%, and 19.5% in rapid succession. These cascading declines reflect deteriorating market structure, further confirmed by the downward trajectory of both the 50-day and 200-day Exponential Moving Averages (EMAs). With price trading well below these key moving averages, the trend remains firmly bearish.
Market analyst @CarpeNoctom highlighted this concern on X, noting that the weekly chart for ETH/BTC has failed to confirm a bullish divergence—a pattern where price makes lower lows but momentum indicators form higher lows. The absence of such a signal suggests selling pressure remains dominant, even during temporary lulls in volatility.
ETF Outflows and Weak On-Chain Activity Add Pressure
Beyond technicals, fundamental drivers are also weighing heavily on Ethereum’s outlook. One major factor is the sustained outflow from spot Ethereum ETFs in the United States—a stark contrast to the resilience seen in spot bitcoin ETFs.
As of March 2025, net inflows into spot ether ETFs had declined by 9.8%, settling at $2.54 billion. In comparison, spot bitcoin ETFs saw a much smaller drop of 2.35%, maintaining net inflows at $35.74 billion. This widening gap indicates that institutional capital continues to favor bitcoin over Ethereum, reinforcing BTC’s status as the preferred digital asset among large investors.
On-chain data further supports this narrative of weakening demand. Median gas fees on the Ethereum mainnet stood at around 1.12 GWEI in March—nearly 1/50th of what they were a year earlier. Low transaction costs might seem positive at first glance, but when paired with stagnant usage metrics, they suggest minimal network congestion and limited user activity.
Nansen, a leading blockchain analytics firm, noted in its latest report:
“Although ether prices saw a second rebound toward the end of 2024, mainnet activity measured by gas consumption never fully recovered.”
The report attributes this stagnation to a broader shift in ecosystem activity—much of which has migrated to Solana and Layer-2 (L2) scaling solutions built on Ethereum itself.
This decentralization of activity raises concerns about Ethereum’s core value proposition. If most high-growth applications are moving to L2s or competing chains, does the base layer still command premium valuation?
Nansen concludes that given the unfavorable risk-reward profile of ether compared to both bitcoin and undervalued niche altcoins, their stance remains cautiously bearish.
Declining Futures Volume Reflects Fading Interest
Another red flag emerges from derivatives markets. Bitcoin futures volume surged 32% between February 23 and March 18, reaching $57 billion—a clear sign of renewed speculative and hedging interest.
In contrast, Ethereum futures activity has remained flat, according to data from Glassnode. This divergence highlights a growing apathy toward ether among traders and institutions alike. When capital gravitates toward BTC derivatives while bypassing ETH, it signals a shift in market hierarchy.
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ETH/BTC May Drop Another 15%: Bearish Flag Pattern Forms
Technically, the daily chart for ETH/BTC is forming a bearish flag pattern—a classic continuation setup that typically follows a strong downward move. The flag represents a period of consolidation within converging trendlines before the prior downtrend resumes.
For this pattern to confirm, price must break below the lower boundary of the flag. Once broken, the expected drop equals the height of the initial decline leading into the flag formation. Applying this measurement projects a potential target of 0.01968 BTC for ETH—approximately 15% below current levels.
Additionally, both the 50-day and 200-day EMAs continue their steep descent, with price trading significantly below them. This reinforces the dominance of sellers and suggests any rallies are likely corrective rather than structural reversals.
That said, a breakout above the upper resistance of the flag could invalidate the bearish setup. If accompanied by a retest of the 50-day EMA acting as support—and ideally confirmed by rising volume—it could open the door for a more optimistic scenario.
Until such a shift occurs, however, the path of least resistance remains downward.
Frequently Asked Questions (FAQ)
Q: Why is ETH/BTC important to watch?
A: The ETH/BTC ratio measures ether’s strength relative to bitcoin. A falling ratio means ETH is underperforming BTC, often signaling weaker investor appetite for altcoins overall.
Q: What causes low gas fees on Ethereum?
A: Low gas fees result from reduced network congestion, meaning fewer transactions are competing for block space. While efficient, persistently low fees may indicate weak demand for dApps on the mainnet.
Q: Can Ethereum recover if Layer-2 activity is strong?
A: Strong L2 usage benefits the broader Ethereum ecosystem, but unless that activity translates into increased settlement demand or fee burn on the main chain, it may not directly boost ETH’s price.
Q: How reliable are bearish flag patterns?
A: Bearish flags are statistically reliable continuation patterns when they follow significant drops and resolve with volume-backed breakdowns. They work best when aligned with broader market trends.
Q: Are ETF outflows always negative for price?
A: Persistent outflows suggest weakening institutional demand and can exert downward pressure on price, especially in mature markets where ETFs represent major liquidity channels.
Q: What would reverse the current bearish outlook for ETH?
A: A sustained break above key resistance levels, rising futures volume, positive on-chain momentum (e.g., higher gas use or staking rates), and inflows into ETFs could collectively shift sentiment.
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Final Thoughts
Ethereum remains caught in a challenging phase marked by declining relative strength, fading institutional interest, and shifting ecosystem dynamics. The confluence of technical breakdowns, ETF outflows, weak on-chain activity, and tepid derivatives engagement paints a coherent story: ether is currently losing ground to bitcoin and faces an uphill battle to regain momentum.
While recovery is possible—especially if macro conditions improve or new catalysts emerge—the current trajectory suggests ETH/BTC could extend its decline into late 2025. Traders and investors should remain vigilant, monitor key technical levels closely, and prioritize risk management in this environment.
This article does not constitute investment advice. All trading involves risk. Please conduct your own research before making any financial decisions.
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