3 metrics hint that the Ethereum (ETH) price correction is not over

After rallying to $4,091 leading into the Dencun upgrade, Ether (ETH) has underperformed over the last month compared to Bitcoin and the broader crypto market, leading traders to doubt whether the altcoin’s downtrend is over.

To put this into context, Bitcoin’s (BTC) price fell by 18% during the same period, while the total cryptocurrency market capitalization dropped by 16%.

A number of market and technical indicators show that ETH may witness a deeper correction before embarking on a sustained recovery.

ETH//USD daily chart. Source: TradingView

The ETH/BTC ratio trended lower in March

Ether is up 8% so far in March but has underperformed Bitcoin as well as other top layer 1 tokens. BTC price has rallied 21% over the last 30 days, while other top-cap layer 1 tokens, such as BNB Chain’s BNB and Solana’s SOL, have rallied 44% and 76%, respectively, over the same timeframe.

The ETH/BTC ratio declined throughout March, reaching its lowest since January.

ETH/BTC ratio. Source: TradingView

Currently, there are a handful of reasons for ETH’s underperformance in March, including Bitcoin-specific factors in 2024. U.S. spot Bitcoin ETFs have largely been a success since their approval by the Securities and Exchange Commission on Jan. 11. In addition, the upcoming Bitcoin supply halving, which has historically preceded a parabolic uptrend in crypto prices, has added to BTC’s tailwinds.

Moreover, there has been a decline in Ethereum’s network activity (in specific metrics) over the last week. Data from Glassnode shows that daily active addresses on Ethereum have dropped from 622,963 addresses on March 20 to 546,484 on March 26.

Number of active addresses on Ethereum. Source: Glassnode

Although Ethereum remains the network to beat in the layer 1 sector, Solana has recently captured its market share in this segment in terms of on-chain activity and stablecoin transfer volume.

Related: Munchables hacker returns $62.8M Ether without ransom

Ether faces stiff resistance on the upside

Ether’s latest attempt at recovery was rejected by supply congestion from the $3,600 level. This is an indication that this area presents a…

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