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The recent downturn in Ethereum (ETH) has investors questioning the altcoin’s future, particularly after March’s sharp decline of 18.47%.
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As ETH closes four consecutive months in the red, analysts debate whether this trend signals a potential price bottom or indicates further losses.
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Notably, VentureFounder emphasizes the likelihood of a bottom forming soon, referencing historical patterns that could suggest a future recovery. “Maybe another lower low RSI and one more push downward,” he said.
This article explores Ethereum’s recent price trends and historical patterns, analyzing potential market implications for April 2023 and beyond.
Ethereum/Bitcoin ratio hits new 5-year low
On March 30, the **Ethereum/Bitcoin ratio** witnessed a significant decline, dropping to a five-year low of **0.021**. This ratio serves as a critical metric for investors, illustrating how ETH is performing relative to BTC over a substantial time frame. The recent downturn underscores **Ether’s underperformance**, which has become increasingly apparent when compared to Bitcoin over the past five years.
Interestingly, this level marks a historical precedent; the last time the ETH/BTC ratio fell to **0.021** was during May 2020, coinciding with ETH prices between **$150-$300**. This decline could have broader implications for investors trading in both cryptocurrencies.
Moreover, statistical data from the **Token Terminal** reveals that Ethereum’s monthly fees plummeted to just **$22 million** in March 2023, the lowest since June 2020. This decrease indicates a downturn in network activity—lower fees often signal diminished market interest and reduced network utility.
As Ethereum’s value and revenue struggle, analysts like VentureFounder suggest that more volatility may be on the horizon for the ETH/BTC ratio, potentially hitting a new bottom between **0.017 and 0.022** before a recovery phase begins.
Historical odds favor a short-term bottom
Delving into Ethereum’s past performance, it is noteworthy that ETH has undergone three or more consecutive negative monthly candles on **five occasions** since its launch. Each time this has occurred, a short-term bottom followed. For instance, the most severe consecutive bearish streak took place in 2018, with seven successive months in the red, after which Ethereum prices surged by **83%**.
Furthermore, during 2022, ETH maintained a consolidation phase for nearly a year after a similar three-month bearish trend, with prices establishing a bottom after the third red candle in June. Historically, there has been a **75% probability** for Ethereum to register a green month in **April**, a tendency that could serve as a guiding expectation for traders.
In analyzing quarterly performance, data shows that Ethereum experiences the least drawdowns in the second quarter compared to other quarters, with average returns soaring as high as **60.59%**. This trend suggests a strong potential for positive returns as April unfolds.
Market Sentiment and Future Outlook
The prevailing bearish sentiment surrounding Ethereum’s market performance poses both risks and opportunities. While current data may seem concerning, the historical patterns hint at a potential bullish turnaround. As stakeholders assess market indicators such as the ETH/BTC ratio and historical monthly candle closures, the outlook for April could reveal critical turning points for Ethereum’s price trajectory.
Conclusion
In summary, while Ethereum faces a challenging market environment evidenced by its downtrend and historical ratios, the potential for a short-term recovery remains. Investors should observe further movements in the ETH/BTC ratio and April’s forthcoming market dynamics for clues to potential recovery. Remembering the lessons of history, there might be a silver lining ahead for **Ethereum** as it strives to regain momentum.
