Ethereum has entered a period of intensified market pressure, with its price falling sharply and the ETH/BTC ratio plunging to its lowest level since 2021. Over the past 30 days, Ethereum has lost more than 30% of its value against Bitcoin, marking its weakest performance relative to BTC since January 2021. This shift highlights growing bearish sentiment in the market and raises questions about Ethereum’s near-term resilience amid rising selling pressure.
For most of February, Ethereum traded within a tight price range, showing signs of consolidation. However, on February 25, it broke below the lower boundary of this range, triggering a downward momentum. As of now, Ethereum is trading at $2,089 — a level last seen in December 2023. This decline has pushed the ETH/BTC ratio down to 0.02, the lowest point since early 2021.
Understanding the ETH/BTC Ratio
The ETH/BTC ratio measures how many Bitcoins are needed to purchase one Ethereum. A declining ratio indicates that Ethereum is underperforming compared to Bitcoin — often interpreted as a sign that investors are favoring Bitcoin over altcoins during times of market uncertainty.
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This recent drop in the ratio reflects not only weaker demand for Ethereum but also structural changes in its supply dynamics. One key factor contributing to the downward pressure on ETH’s price is the increased net issuance of new tokens into circulation.
According to data from Ultra Sound Money, over 66,748 ETH — worth more than $140 million — have entered circulation in the past month alone. This increase stems from a reduced token burn rate, which weakens Ethereum’s deflationary mechanism. When fewer tokens are burned through transaction fees, the net supply grows, potentially diluting value if demand does not keep pace.
Supply Pressure and Market Sentiment
Ethereum’s transition to proof-of-stake was expected to enhance scarcity by reducing issuance and enabling consistent burns. However, recent network activity shows a slowdown in fee-based burns, leading to positive net issuance — a rare occurrence that undermines long-term bullish narratives.
An expanding supply without corresponding demand growth typically exerts downward pressure on price. In this context, Ethereum faces dual challenges: weakening investor confidence and unfavorable on-chain economics. Traders are increasingly reallocating capital toward Bitcoin, perceived as a safer store of value during volatile periods.
Technical indicators further support this bearish outlook. On the daily chart, Ethereum is now trading below the lower trendline of a long-term descending channel — a significant break that often precedes further downside movement.
Technical Outlook: Can Ethereum Recover?
Currently, Ethereum’s position beneath the descending channel suggests strong selling momentum. If bearish sentiment persists, the next major support level lies around $1,922. A break below $2,000 could accelerate selling, especially if broader market conditions remain unfavorable or macroeconomic headwinds intensify.
On the upside, a recovery in demand could push prices back toward $2,223 — a level that previously acted as resistance and may now serve as short-term resistance-turned-support. For such a rebound to occur, sustained buying interest and improved network fundamentals would be necessary.
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Until then, traders should monitor key metrics such as on-chain transaction volume, exchange outflows, and staking participation rates for early signs of renewed confidence.
Core Keywords Driving Market Discussion
To better understand the current dynamics shaping Ethereum’s trajectory, it’s essential to focus on several core keywords that capture the essence of ongoing market conversations:
- Ethereum price
- ETH/BTC ratio
- Cryptocurrency market trends
- Ethereum supply increase
- Bitcoin dominance
- Market bearish sentiment
- Token burn rate
- Crypto technical analysis
These terms reflect both technical and fundamental aspects influencing investor behavior and should be naturally integrated when analyzing Ethereum’s performance.
Frequently Asked Questions (FAQ)
Why is the ETH/BTC ratio important?
The ETH/BTC ratio shows how Ethereum is performing relative to Bitcoin. A declining ratio suggests that ETH is losing value compared to BTC, often signaling risk-off behavior among traders who prefer Bitcoin during uncertain markets.
What causes an increase in Ethereum’s circulating supply?
Ethereum’s supply increases when the number of newly issued staking rewards exceeds the amount of ETH burned through transaction fees. If burn rates drop due to lower network activity, net issuance turns positive, increasing total supply.
Is Ethereum still deflationary?
Not currently. While Ethereum was designed to become deflationary post-upgrades, recent data shows net inflation due to low burn rates. Deflation resumes only when more ETH is burned than issued daily.
What does trading below the descending channel mean?
Breaking below a long-term descending channel typically indicates accelerating bearish momentum. It suggests that sellers are in control and may lead to further price declines unless strong buying pressure emerges.
Could Ethereum recover above $2,200 soon?
A move back toward $2,223 is possible if demand increases and market sentiment improves. However, this would require stronger on-chain activity, higher institutional interest, or favorable macroeconomic developments.
How does Bitcoin dominance affect altcoins like Ethereum?
When Bitcoin dominance rises, capital tends to rotate out of altcoins and into Bitcoin. This often leads to underperformance in assets like Ethereum until market risk appetite returns.
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Final Thoughts
Ethereum’s recent slide below $2,100 — approaching a critical $2,000 threshold — underscores growing concerns about its short-term outlook. With the ETH/BTC ratio at a four-year low and net supply increasing, structural and psychological factors are aligning against a quick recovery.
However, history shows that periods of weakness often precede renewed innovation and adoption cycles. Investors should remain informed, monitor key technical levels and on-chain metrics closely, and prepare for volatility as the market navigates this challenging phase.
While caution is warranted, opportunities may emerge for strategic participants who understand the underlying technology and long-term potential of Ethereum’s ecosystem.