Author: Yashu Gola, CoinTelegraph; Translated by: Tao Zhu, Golden Finance

Ethereum's native token, the exchange rate of Ethereum against Bitcoin has fallen to its lowest point in years, prompting analysts to predict that Ethereum will fall further in the next few weeks.

On March 13, ETH/BTC (a currency pair that tracks the strength of Ethereum against Bitcoin) fell by more than 1.50% to $0.022, the lowest level since May 2020.

The decline in ETH is part of its multi-year downtrend, beginning with a record high of $0.156 in June 2017. ETH has plummeted by more than 85% since then, highlighting the weakness of Ethereum against Bitcoin.

At the same time, the relative strength index (RSI) of the momentum indicator used to measure whether an asset is overbought or oversold has fallen to an all-time low of 23.32 on the two-week ETH/BTC chart.

ETH/BTC two-week price chart. Source: TradingView

Generally, when RSI falls below 30, it indicates an oversold situation that can lead to a price rebound.

However, in the case of Ethereum, RSI continued to decline after two months of oversold, indicating that the downward trend of ETH is still accelerating rather than stabilizing.

Cryptocurrency analyst Alessandro Ottaviani describes this situation as a “falling knife” scenario—a term used to describe assets experiencing a rapid and dramatic decline that often prevents buyers from getting involved too early.

The fall of the knife means that if the downward trend continues, attempting to buy assets at low points may lead to further losses.

To signal a potential reversal of Ethereum, traders will focus on the stability of RSI and the recovery of key resistance levels. Ideally, this began with a rebound from the 0.022 BTC level, which limited ETH/BTC’s downside attempt in December 2020, resulting in a 300% rebound.

ETH/BTC Weekly Price Chart. Source: TradingView

In case of a rebound, the ETH/BTC pair can rebound to the 0.382 Fibonacci retracement line, approximately 0.038 BTC, consistent with the 50-week exponential moving average (50-week EMA; red wave).

Before this, the technical prospects showed that ETH/BTC might still be trapped in its downward knife trajectory, the next potential downward targetHistorical support levels within the 0.020-0.016 BTC range.

ETH/BTC two-week price chart. Source: TradingView

The lowest point in this range is about 30% lower than the current price level.

The prospect of further decline of Ethereum against Bitcoin stems from factors other than technical analysis.

For example, Ethereum is currently facing fierce competition from its competitor's first-tier blockchain, Solana.

VanEck noted that Solana's decentralized transaction volume exceeded Ethereum even as memecoin trading activity plummeted. Meanwhile, Solana's trading volume has been rising continuously in recent months, while Ethereum's trading volume has been declining.

Solana compares transaction volume with Ethereum DEX. Source: VanEck

In addition, the launch of spot Bitcoin ETFs has fundamentally changed the traditional cryptocurrency market cycle that has been favorable to Ethereum and other altcoins in the past.

Historically, capital turned to altcoins after the Bitcoin halving soared, triggering a “altcoin season” where ETH and other assets outperformed BTC. However, the $129 billion flowing into Bitcoin ETFs in 2024 disrupted the cycle, exhausting liquidity in the wider altcoin market, including Ethereum.

Bitcoin-dominated index weekly price chart. Source: TradingView

Another factor is the selling pressure unique to Ethereum.

Recent Bybit hacks have reportedly resulted in massive ETH liquidation, with some of the value being whitewashed through decentralized platforms such as Thorchain. This absorbed sell-off may still affect the entire market, depressing the relative value of ETH.