Last week, the market maintained a steady state, providing investors with opportunities to accumulate more after a small sell-off. This morning started with buying demand, especially for leading assets: Bitcoin and Ethereum, as they started to regain their previous strength. However, despite the continued rise in Ethereum’s price, there is a potential for a decline in investor confidence as the ETHBTC ratio hits its lowest level in fifteen months – a level not seen since the Proof of Stake (PoS) transition of Ethereum.
Buyer confidence is decreasing due to the ETH price
Aside from the recent pump and dump play in Bitcoin’s value due to inaccurate news from Cointelegraph about the SEC’s approval of Blackrock’s spot BTC ETF, the ETHBTC ratio is hovering at a 15-month low. This represents the biggest dip since Ethereum’s transition to Proof of Stake (PoS) last year.
The ETHBTC chart has shown a notable downward trend in recent months, indicating that Ethereum is losing traction against Bitcoin. The ratio currently stands at 0.056, indicating a growing investor tilt towards Bitcoin over Ethereum for huge returns.
Bitcoin-focused mutual funds, for example, have seen inflows of $246 million from the start of the year through October 6, according to data from CoinShares. Conversely, Ethereum funds experienced a decline during this period, with capital outflows of $104 million.
Due to the recent volatility in the ETH price, positions worth over $20 million were liquidated and 50% of them were in the long position, indicating increased fear following the Cointelegraph fake news. Furthermore, there has been a decline in interest in whales as large transactions dropped from 1.3 million ETH to just 600,000 ETH today.
What’s next for the ETH price?
This analysis was made without taking into account the recent pump-and-dump situation in the ETH price space.
Over the past 24 hours, ETH price has undergone a bullish push as it attempted to rise above $1,600. However, increasing selling pressure from STHs is creating a barrier, strengthening the immediate resistance level. At the time of writing, ETH price is trading at $1,578, up over 1.6% from yesterday’s price.
The Relative Strength Index (RSI) is showing signs of positive divergence, indicating that bearish momentum may be losing steam. The bulls are trying to drive the price towards the EMA200 trendline, where the bears are expected to mount a robust defense.
Should the price fall sharply from the 20-day Exponential Moving Average (EMA), it would indicate that the bears still remain in control. In such a scenario, ETH price could potentially fall below $1,521.
To avoid this decline, the bulls must push the price above the moving averages. This could lead to the price rising to $1,660, although the bulls may again face strong selling pressure from the bears at this point.