On March 13, according to Cointelegraph, the ETH/BTC exchange rate fell more than 1.5% today, reaching 0.0224, the lowest level since May 2020. Analysts predict that it may further decline in the coming weeks, as this drop is a continuation of the long-term downtrend since reaching a historical high of 0.156 in June 2017, with a cumulative decline of over 85%, highlighting the persistent weakness of Ethereum against Bitcoin.
In the two-week ETH/BTC chart, the momentum indicator - the Relative Strength Index (RSI) - has fallen to a historical low of 23.32. Typically, when the RSI falls below 30, it enters the oversold territory, which may trigger a price rebound. However, Ethereum's RSI has continued to decline even two months after entering the oversold state, indicating that its downtrend has not stabilized, but rather is accelerating. Crypto analyst Alessandro Ottaviani refers to this phenomenon as a "falling knife" scenario, where the asset price plummets rapidly, deterring buyers from attempting to catch the bottom, potentially leading to further losses.
To confirm a trend reversal, traders need to monitor the recapture of key resistance levels and the stabilization of the RSI. Ideally, ETH/BTC needs to start a recovery from the 0.022 BTC level, where a 300% rebound was triggered in December 2020. If a rebound occurs, the pair may target the 0.382 Fibonacci retracement level around 0.038 BTC, which coincides with the 50-week Exponential Moving Average (50-week EMA). Prior to this, the technical analysis suggests that ETH/BTC may continue the "falling knife" trajectory, with the next potential support level in the historical 0.020-0.016 range, the lower end of which still represents about a 30% downside potential from the current rate.
The weakness of the ETH/BTC rate is not only due to technical factors. Ethereum is currently facing strong challenges from competing Layer 1 blockchains such as Solana and Sui, leading to a dispersal of market attention. Additionally, Bitcoin's "digital gold" status and its defensive properties continue to attract capital inflows amid macroeconomic uncertainties, while Ethereum has not yet fully realized the expected ecosystem explosion after its transition to Proof-of-Stake (PoS), exacerbating the pressure on ETH/BTC due to the capital rotation effect.
