Ethereum faces challenges in its competition with Bitcoin. In the past two weeks, ETH has shown volatility that is twice as much as BTC. As we near the end of the year, the difference is clear: Bitcoin has cut its losses to 9.41%, while Ethereum has seen a drop of 18%. The ETH/BTC ratio saw a decrease of 7% this week, dropping below its previously steady range of around 0.36 that held firm during October. Simply put, the capital movement towards Ethereum seems to be weaker, with investors currently favoring BTC instead of ETH. On the optimistic side, however, this breakdown has shifted the directional bias.
The ETH/BTC ratio crossing 0.36 has triggered a fresh sell-off in ETH relative to BTC, setting the stage for more defined trends in the pair. As BTC dominance meets resistance at 61%, it is leading to a movement of funds back into altcoins. In this scenario, Ethereum’s drop toward $3,000 acts as a positive signal. If buyers enter the market, it opens the door for capital to shift into certain alternative cryptocurrencies, while Bitcoin seems to carry more risk. It seems that ETH traders are already preparing for this situation. Ethereum is gaining momentum as positive factors begin to align, and a mix of supportive signals indicates that Ethereum might be regaining traction.
On November 4th, ETH saw a notable drop, reaching a multi-month low of $3,000. This downturn coincided with large investors acquiring 394,682 ETH for a total of $1.37 billion, establishing their cost basis at approximately $3,488 per coin. The primary factor, however, is found in derivatives. After the mid-October crash, Ethereum Open Interest has dropped by $30 billion, while Bitcoin has experienced a $24 billion decrease, suggesting a more pronounced leverage shakeout for ETH. This cleanup of leveraged positions is viewed as healthy for Ethereum’s market structure, potentially setting the foundation for a more sustainable recovery phase.
In conclusion, Ethereum’s Q4 momentum relative to BTC remains positive. Whales are taking advantage of the dip, the ETH/BTC ratio seems to have found a stable level, BTC dominance is encountering resistance, and ETH has undergone a significant leverage cleanout. These factors collectively indicate a series of early bullish signs, suggesting that Ethereum is currently in a phase of accumulation and momentum-building. If this trend holds, ETH could still flip its Q4 momentum, breaking the streak of lower quarterly gains compared to BTC, with $3,000 acting as a solid rebound zone that could set the stage for a meaningful bounce in Ethereum against Bitcoin.