Ether Faces Continued Downside as ETH/BTC Ratio Hits Multi-Year Lows

Ethereum (ETH) traders are bracing for more volatility as the ETH/BTC trading pair drops to its lowest point in over three years. With the ratio of ETH to BTC plummeting to 0.03496, market analysts are increasingly cautious about any potential rebound in the near term.

ETH/BTC Ratio Hits Multi-Year Lows

On November 5, Alex Thorn, Head of Research at Galaxy, highlighted the significant decline in the ETH/BTC ratio, which has now reached levels unseen since March 2021. The ratio has dipped below 0.035, marking a new multi-year low, raising concerns about Ethereum’s performance relative to Bitcoin. Thorn noted the drop in a post on X (formerly Twitter), stating, "ETHBTC with new multi-year lows 0.03496."

No Reversal in Sight

Many analysts are skeptical about the possibility of an immediate reversal. Market commentator Zach Voell pointed out that the ETH/BTC pair continues to slide with no sign of a recovery. "Don’t let the election distract you from the fact that ETHBTC continues plummeting to new lows," Voell remarked.

Similarly, Colin Talks Crypto added to the bearish sentiment, forecasting that the ratio could fall further before any significant bounce. Despite these concerns, some traders are keeping an eye on the potential for a longer-term recovery.

Historical Patterns Suggest a Possible Rebound

Interestingly, historical data provides some hope for traders who are anticipating a recovery. In March 2021, when the ETH/BTC ratio reached similar levels, Ethereum experienced a strong rally, and within two months, the ratio surged to 0.077. Ether's price also climbed by 120%, hitting a record high of $3,928.

A few market participants are optimistic that a similar trend could unfold, with crypto commentator Benaiah expressing his belief that “the coming pump will be epic.”

Pressure on Ether Amid Bitcoin's Strong Performance

While some traders are hopeful for a rebound in Ether's value, many remain focused on Bitcoin’s continued strength. With the U.S. presidential election outcomes potentially driving Bitcoin prices higher, Ethereum could see further downside if it does not outperform Bitcoin in the coming months.

As of publication, Ether is trading at approximately $2,445, while Bitcoin remains a dominant force in the market.

For the ETH/BTC ratio to improve, Ethereum will need to show significant strength relative to Bitcoin, a challenge in the current market environment where Bitcoin is drawing the most attention.

Increased Derivative Activity Signals Potential Volatility

Adding to the uncertainty, crypto data platform CryptoQuant reported that 82,000 ETH, worth about $200.49 million, flowed into derivative exchanges on November 5. This movement suggests that increased volatility could be on the horizon, with the potential for a downturn or sharp market movements.

Amr Taha, a contributor at CryptoQuant, noted that such activity could lead to heightened market volatility, indicating the possibility of a price correction or sudden moves depending on how traders position themselves.

Market Outlook Post-Election

With the U.S. presidential election results in focus, analysts are divided on how the broader crypto market will react. Bitfinex analysts expect a major spike in volatility following the election, which could fuel significant price movements. Some analysts have even warned that this volatility could signal a deeper correction for Bitcoin in the short term, which would further pressure Ethereum's position against BTC.

As traders closely monitor the unfolding market conditions, the next few weeks will be crucial for both Ethereum and Bitcoin. Whether Ethereum can recover against Bitcoin or continue to struggle will depend on broader market trends and Bitcoin’s continued dominance in the coming months.