Ethereum's (ETH) Not Having a Good Time Against Bitcoin Right Now. It Might Just Be the Start.

On March 28, the ETH/BTC pair dropped over 3.5% intraday, falling to around 0.0225 BTC—a level we haven't seen since, uh, May 2020.

Ethereum (ETH) is having a rough time against Bitcoin (BTC) right now, as the ETH/BTC pair fell over 3.5% intraday on March 28, dropping to around 0.0225 BTC for the first time since May 2020. If the charts are anything to go by, it might not stop there.

Bear Flag? Yep. And It’s Not Looking Great.

Those who follow chart patterns will recognize the classic bear flag formation that ETH/BTC had been bouncing inside since early March, with the price breaking below the lower trendline of the channel. Usually, bear flags are just temporary upticks in a downtrend, which might continue after the bear flag is formed.

Technical analysis:

The projected downside target for the bear flag pattern is around 0.021 BTC, which is about a 6% drop from the current price.

The pair is still trading way below both the 50-day EMA (0.02566) and the 200-day EMA (0.03338), which signals that the downtrend is still intact.

The RSI is approaching the 33.5 level, which is typically used to denote oversold territory. However, the RSI is still relatively high, and it might take some time for the selling pressure to subside.

So Why Is ETH Struggling?

Those who have been following the crypto market for some time will know that Ethereum has been lagging behind Bitcoin since 2017, falling over 85% from its all-time high of 0.156 BTC.

Several factors are contributing to Ethereum's struggles. The Bitcoin spot ETF hype has obviously favored BTC over other cryptocurrencies, while competitors like Solana (SOL), Cardano (ADA), SUI, and others are steadily grabbing attention and market share. Among these competitors, SOL has been performing exceptionally well against ETH for months.

Moreover, macroeconomic factors are also playing a role. Trump's tariffs on China, Mexico, and Canada are stirring up tension and could lead to a selloff in riskier assets. In such a scenario, Ethereum is likely to be sold off faster than Bitcoin, as it is still perceived as the safer crypto bet.

It's worth noting that ETH tends to mirror the stock market more closely than BTC. Its 52-week correlation with the S&P 500 is 0.69, while BTC's correlation is lower at 0.52. This suggests that if stocks start to decline, ETH is likely to follow suit, and at a faster pace.

Overall, Ethereum is facing several headwinds that could lead to further weakness in the ETH/BTC pair. However, if the pair manages to close above the 50-day EMA, it could signal a shift in momentum, and we might see a move towards the 200-day EMA, offering some relief for beleaguered bulls. Nonetheless, with the pair still holding above the 0.02 BTC support, there is potential for additional downside in the upcoming sessions.