Ether (ETH) has been underperforming in the crypto market compared to Bitcoin and other cryptocurrencies, raising concerns among traders about its downtrend. While Bitcoin’s price fell by 18% and the total cryptocurrency market capitalization dropped by 16% in the past month, ETH has struggled to keep up. Various market indicators suggest that ETH may experience a deeper correction before recovering.
In March, the ETH/BTC ratio declined, reaching its lowest level since January. ETH is up 8% this month, but it has lagged behind Bitcoin and other layer 1 tokens like BNB and SOL, which have rallied significantly.
There are several reasons for ETH’s underperformance in March. Bitcoin-specific factors, such as the success of U.S. spot Bitcoin ETFs and the upcoming Bitcoin supply halving, have contributed to BTC’s strong performance. Additionally, Ethereum’s network activity has declined, with a decrease in daily active addresses.
Although Ethereum remains a dominant player in the layer 1 sector, Solana has gained market share in terms of on-chain activity and stablecoin transfer volume.
Ether’s recent recovery attempt was rejected at the $3,600 level, indicating strong resistance. Data from IntoTheBlock shows that this resistance zone, ranging from $3,534 to $3,639, has a significant number of addresses that previously bought ETH. If this resistance level sees heavy selling activity, ETH’s price is likely to decline further.
Furthermore, a bear flag pattern can be observed on the daily chart, suggesting a continuation of the downtrend. Ether bulls are relying on support from the lower boundary of the flag at $3,497. A close below this level would signal a bearish breakout and potentially lead to a 26% decline to $3,060.
It’s important to note that this article does not provide investment advice. Readers should conduct their own research and make informed decisions when it comes to investing and trading.