The cryptocurrency market has long been dominated by two major players: Bitcoin (BTC) and Ethereum (ETH). While Bitcoin continues to strengthen its position as digital gold, Ethereum—despite its technological edge and leading role in decentralized applications—has struggled to keep pace. Recently, the ETH/BTC trading pair hit a three-and-a-half-year low on September 18, last seen during the 2021 bull run. This raises a critical question for investors and traders: Is this dip a buying opportunity, or is Ethereum poised for further underperformance?
Let’s dive into the technical structure, market sentiment, and fundamental drivers shaping the future of the ETH/BTC ratio.
The Bearish Trend in ETH/BTC
For months, Bitcoin has traded in a tight consolidation range, with many analysts anticipating a breakout in Q4 2025 that could push it toward new all-time highs. In contrast, Ethereum has lagged significantly behind.
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On-chain data and sentiment indicators suggest weak momentum for Ether relative to BTC. According to Polymarket, the world’s largest prediction market, there’s an 85% probability that Ethereum will not reach a new all-time high in 2025. This bearish sentiment is reflected clearly in the ETH/BTC chart.
The weekly chart reveals a symmetrical triangle pattern, a classic sign of market indecision. Buyers are defending key support levels, while sellers maintain strong resistance near the upper boundary. Both the 50-week and 200-week moving averages are sloping downward, and the Relative Strength Index (RSI) is hovering near oversold territory—indicating sustained selling pressure.
If the price breaks below the lower trendline of the triangle, the pair could see a sharp decline. However, a breakout above resistance could signal a reversal in trend, potentially targeting 0.18 BTC—a level notably higher than the previous high of 0.15 BTC.
Daily Chart: Signs of Stabilization?
Zooming into the daily timeframe, the ETH/BTC pair has been trading within a descending channel, characterized by lower highs and lower lows—a textbook bearish formation.
Yet, there are early signs of potential stabilization:
- The 20-day Exponential Moving Average (EMA) at approximately 0.04 BTC has started to flatten.
- The RSI is showing positive divergence, suggesting that downward momentum may be weakening even as price hits new lows.
These signals imply that selling pressure could be nearing exhaustion. A decisive close above the 50-day Simple Moving Average (SMA)—also around 0.04 BTC—would strengthen the case for a shift in momentum. More importantly, a sustained breakout above the descending channel’s upper boundary would confirm a trend reversal.
Until then, the path of least resistance remains downward.
Key Support and Resistance Levels
Understanding critical price zones is essential for traders evaluating entry and exit points:
- Immediate Resistance: 0.042 BTC (50-day SMA and channel upper boundary)
- Strong Resistance: 0.048–0.050 BTC (confluence of longer-term moving averages)
- Immediate Support: 0.038 BTC (recent swing low)
- Major Support: 0.032 BTC (lower boundary of the descending channel)
A breakdown below 0.038 BTC would invalidate the short-term bullish thesis and likely accelerate selling toward deeper support levels.
Conversely, reclaiming 0.042 BTC could attract fresh buying interest and set the stage for a retest of 0.05 BTC—a psychological and technical milestone for Ethereum bulls.
Why Is Ethereum Underperforming?
Several factors contribute to ETH's relative weakness:
- Bitcoin Dominance Surge: Institutional inflows into Bitcoin ETFs have amplified BTC’s dominance, drawing capital away from altcoins.
- Delayed Catalysts for Ethereum: While Ethereum remains the leader in smart contracts and DeFi, anticipated upgrades like full rollup adoption and further scalability improvements have taken longer than expected.
- Market Risk Aversion: In uncertain macroeconomic environments, investors often favor Bitcoin as a safer store of value over more speculative assets like ETH.
Despite these headwinds, Ethereum still holds strong fundamentals—especially in areas like staking, decentralized finance (DeFi), and NFT infrastructure.
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Is Ethereum a Contrarian Bet for Late 2025?
Not all analysts are bearish. Matt Hougan, Chief Investment Officer at Bitwise Asset Management, suggested in a September 17 blog post that Ethereum might be “a potential contrarian bet by year-end.”
This view hinges on several assumptions:
- A post-halving altseason could ignite renewed interest in top-tier smart contract platforms.
- Increased adoption of layer-2 networks built on Ethereum may drive demand for ETH as gas and settlement fuel.
- Regulatory clarity could boost institutional confidence in ETH as a compliant digital asset.
If Bitcoin stabilizes after a potential Q4 rally, capital may rotate into undervalued altcoins—with Ethereum being one of the most liquid and credible options.
FAQ: Common Questions About ETH/BTC
Q: What does the ETH/BTC ratio tell us?
A: The ETH/BTC ratio measures how much Ether is worth in terms of Bitcoin. It helps investors assess whether Ethereum is gaining or losing strength relative to Bitcoin, independent of overall market direction.
Q: Why has ETH/BTC reached a multi-year low?
A: Increased institutional focus on Bitcoin ETFs, slower-than-expected Ethereum upgrades, and broader risk-off sentiment have all contributed to ETH underperforming BTC since early 2024.
Q: Can Ethereum ever outperform Bitcoin again?
A: Historically, Ethereum has outperformed Bitcoin during altseasons—periods when investor interest shifts toward high-growth altcoins. If macro conditions improve and Ethereum’s ecosystem expands, such a cycle could return in late 2025.
Q: What technical signal would confirm a bullish reversal in ETH/BTC?
A: A weekly close above 0.048 BTC—breaking out of the symmetrical triangle—would be a strong confirmation of bullish momentum resuming.
Q: Should I buy ETH now if I believe in long-term blockchain innovation?
A: For long-term believers in decentralized applications, DeFi, and Web3 infrastructure, Ethereum remains a foundational asset. However, timing matters—consider dollar-cost averaging or waiting for clearer technical confirmation.
Q: How does staking affect Ethereum’s price outlook?
A: With over 25% of ETH supply staked, reduced circulating supply can create structural scarcity. Higher staking yields may also attract yield-seeking investors during low-volatility periods.
Final Thoughts: Patience Ahead for Ethereum Bulls
While Ethereum faces near-term challenges, its long-term value proposition remains robust. The current ETH/BTC slump reflects market dynamics rather than technological decline.
For traders, the key levels to watch are 0.038 BTC (support) and 0.042–0.048 BTC (resistance). A breakout above resistance could spark a powerful reversal move, potentially extending toward 0.18 BTC over the medium term.
For investors, Ethereum still represents one of the most innovative and widely adopted platforms in crypto. As layer-2 ecosystems grow and real-world use cases expand, demand for ETH may reaccelerate—especially if Bitcoin stabilizes post-rally.
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Ultimately, whether this moment marks a bottom or merely another leg down depends on broader macro trends, investor sentiment, and on-chain activity—all of which are closely monitored by savvy market participants.
As always in crypto: volatility is guaranteed, but opportunity often follows fear.
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