Cointelegraph examines some of the most likely causes of the ongoing decline in the ETH/BTC exchange rate.
The historical price movement of ether has altered.
Ethereum frequently outpaced BTC during positive market trends in prior market cycles, but this connection started to shift from the beginning of 2023. In 2022 and 2023, ether and several other altcoins suffered as the story around the usage of altcoins in Web3, DeFi, and NFTs was questioned.
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Etheruem’s mood was also damaged by strict rules imposed on the cryptocurrency sector, significantly reduced inflows from institutional and retail investors, and an increase in investors seeking refuge in stablecoins tethered to the US dollar.
Ethereum vs. Bitcoin: Why ETH Price Dipped – 3 Vital Reasons Unveiled,Ethereum vs. Bitcoin: Why ETH Price Dipped – 3 Vital Reasons Unveiled
Rise in Bitcoin Dominance
Ether’s performance in its BTC pair changed, but the increasing dominance of Bitcoin also had a negative effect on ETH.
“Just before the April 2024 halving event, Bitcoin’s market dominance has reached 54%, its highest in the last 30 months, indicating the top cryptocurrency is strengthening.”
Bitcoin dominance, which illustrates the power of the asset and is frequently used by investors as a sentiment indicator, is a measure of BTC’s market capitalization in relation to the whole crypto market.
The reduction in Ether’s value in its BTC pair shows that investors are more positive about BTC and may be devoting less money to Ether investments as the Bitcoin halving (April 2024) draws near and they believe a spot BTC ETF is likely.
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Ethereum price declines from Bitcoin relative to important support.
On October 23, the ETH/BTC pair fell below 0.050 BTC, and it has been on a downward trend ever then. The pair’s decline below its 200-week exponential moving average at 0.058 BTC was a noteworthy event that increases the likelihood of more short-term declines.
These elements are probably going to keep having an effect on Ethereum’s pricing in comparison to Bitcoin.
The complex market dynamics, investor attitude, and strict regulatory framework may continue to be the key obstacles for the ETH/BTC pair in the near future.
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