The native token of Ethereum, recorded four successive monthly downturns following an 18.47% decrease in March. The current market framework for the altcoin demonstrates a prolonged bearish trend not witnessed since the bear market of 2022.
As each monthly close occurs beneath the low of the previous month, analysts are initiating discussions on whether ETH is nearing a bottom or if additional declines are anticipated for the altcoin.
Ethereum/Bitcoin ratio reaches new 5-year low
On March 30, the ETH/BTC ratio fell to a five-year low of 0.021. The ETH/BTC ratio assesses ETH’s value in relation to Bitcoin (BTC), and the ongoing decline emphasizes Ether’s underperformance compared to Bitcoin over the last five years.
In fact, the last occasion the ETH/BTC ratio decreased to 0.021, ETH was valued between $150-$300 in May 2020.
Data from the token terminal indicated that Eth’s monthly fees fell to $22 million in March 20205, marking its lowest point since June 2020, signifying diminished network activity and market interest.
Ethereum fees denote the expenses users incur for transactions, which are influenced by network demand. A decline in network fees suggests a decrease in network utility.
Despite the pricing movements and revenue stagnation, Ethereum analyst VentureFounder stated that the ETH/BTC bottom could occur in the upcoming weeks. The analyst alluded to a potential bottom situated between 0.017 and 0.022, indicating that the ratio might decrease further before a rebound. The analyst expressed,
“Perhaps another lower low RSI and one more downward push shows many similarities with the 2018-2019 Fed tightening & QE cycle, anticipating the first higher high post-May FOMC when the Fed concludes QT & commences QE.”
Related: Ethereum price has decreased nearly 50% since Eric Trump’s ‘add ETH’ endorsement
Historical probabilities support a short-term bottom
Since its launch, ETH has recorded three or more consecutive bearish monthly candles on five distinct occasions, and each instance resulted in a short-term bottom. The chart below illustrates that the most consecutive red months occurred in 2018, with seven, but prices surged 83% following the correction.
In 2022, after three successive bearish months, the ETH price stabilized within a range for nearly a year, but the bottom was established on the third bearish candle in June 2022. Historically, Ethereum exhibits a 75% likelihood of experiencing a green month in April.
Analyzing Ethereum’s past quarterly returns, the altcoin displayed the least drawdowns in Q2 compared to other quarters. With average returns in Q2 reaching as high as 60.59%, the chances of positive returns in April are favorable.
Related: What is driving Ethereum (ETH) price increases today?
This article is not intended to provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should perform their own research before making any decisions.
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