Ethereum prints 4 consecutive red monthly candles, but data points to an ETH/BTC bottom

Ethereum’s native token, Ether (ETH), registered 4 consecutive red monthly candles after the altcoin dropped 18.47% in March. The altcoin’s present market construction displays a sustained bearish development not seen because the bear market of 2022.

With every monthly shut going down beneath the earlier month’s low, analysts are starting the controversy about whether or not ETH is approaching a bottom or if there’s extra draw back forward for the altcoin.

Ethereum/Bitcoin ratio hits new 5-year low

On March 30, the Ethereum/Bitcoin ratio dropped to a five-year low of 0.021. The ETH/BTC ratio measures ETH’s worth in opposition to Bitcoin (BTC), and the present decline underlines Ether’s underperformance in opposition to Bitcoin over the previous 5 years.

Actually, the final time the ETH/BTC ratio dipped to 0.021, ETH was valued between $150-$300 in Could 2020.

Data from the token terminal (*4*) Ethereum’s monthly charges dropped to $22 million in March 20205, its lowest stage since June 2020, indicating low community exercise and market curiosity.

Ethereum charges characterize the associated fee customers pay for transactions, which is influenced by community demand. When community charges start to drop, it signifies diminished community utility.

Regardless of the worth motion and income malaise, Ethereum analyst VentureFounder said that the ETH/BTC bottom may happen over the following few weeks. The analyst hinted at a possible bottom between 0.017 and 0.022, suggesting that the ratio would possibly drop additional earlier than a restoration. The analyst stated,

“Perhaps one other decrease low RSI and yet another push downward plenty of similarity with 2018-2019 Fed tightening & QE cycle, anticipating the primary greater excessive after Could FOMC when Fed ends QT & start QE.”

Related: Ethereum price down almost 50% since Eric Trump’s ‘add ETH’ endorsement

Historic odds favor a short-term bottom

Since its inception, ETH has registered three or extra consecutive bearish monthly candles on 5 events, and every time, a short-term bottom was the end result. The chart beneath exhibits that probably the most back-to-back red months occurred in 2018, with seven, but costs jumped 83% after the correction.

In 2022, after three consecutive bearish months, ETH worth consolidated in a variety for nearly a 12 months, but the bottom was in on the third bearish candle in June 2022. Traditionally, Ethereum has a 75% chance of getting a inexperienced month in April.

Primarily based on Ethereum’s previous quarterly returns, the altcoin experienced the least variety of drawdowns in Q2 in contrast to different quarters. With the common returns in Q2 as excessive as 60.59%, the chance of optimistic returns in April.

Related: Why is Ethereum (ETH) price up today?

This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a call.