Major market fluctuations! The ETH/BTC exchange rate has experienced a cliff-like drop. As a seasoned player who has been in the crypto space for many years, it must be pointed out: this wave of decline seems sudden, but in reality, there has long been logical groundwork behind it. Next, I will break down the market's 'chain knife' operating logic in simple, easy-to-understand language to help you see the essence of the market.
1. Technical Aspects: Free-fall decline, support levels rendered useless. The ETH/BTC exchange rate in this round of decline exhibits a 'free fall' characteristic in its technical form. The two-week RSI indicator has fallen to a historical low of 23.32. Although traditional theory suggests that an RSI below 30 falls within the oversold range, the market has not seen a significant rebound; instead, it has shown an accelerated decline, fully reflecting that market sentiment has fallen into an extremely pessimistic 'lying flat' state. Even more severe is that if the current exchange rate cannot hold the key support level of 0.022 BTC, the next target may point directly to 0.016 BTC, which means the exchange rate could further decline by 30%. Blindly trying to catch the falling knife in such a market is no different from 'catching a flying knife with bare hands'; a little carelessness could lead to significant losses.
2. Fundamental Aspects: Internal and external pressures threaten Ethereum's dominant position. Ethereum is currently facing a dual dilemma of 'internal troubles and external threats'. External competitive pressure has surged, with public chain projects like Solana and Tron rapidly rising to challenge Ethereum. For example, Solana's decentralized exchange (DEX) trading volume has surpassed that of Ethereum, while Tron has an advantage in on-chain fee revenue. In the ranking of the most profitable ecological protocols, Ethereum is at risk of falling out of the top 20, which is far from its former status as the 'king of public chains'. Internal issues are also significant; Ethereum's upgrade process has repeatedly encountered obstacles, such as the previous Pectra upgrade failing, and the developer team's progress has been delayed, gradually eroding market patience. The instability on a technical level has led to a withdrawal of funds from the Ethereum ecosystem.
3. Financial Aspects: Institutions favor Bitcoin, while Ethereum is abandoned by funds. Recently, market funds have clearly tilted towards Bitcoin, with institutional investors buying large amounts of Bitcoin spot ETFs while showing little interest in Ethereum. Data shows that this year, funds flowing into Bitcoin ETFs have exceeded 100 billion USD, while Ethereum has barely managed to capture a share in this area. Even more unfavorable is that tonight, 202,000 Ethereum options are set to expire, with a put-call ratio of 1.26, indicating that short positions are already well established. The maximum pain price of 2450 USD is far below the current market price, and institutions are taking the opportunity to short the market for arbitrage, while retail investors become the targets being harvested.
4. Policy Aspects: SEC approval expectations become a smokescreen, and Ethereum faces more bad news. Although the market is waiting for the SEC's approval of Ethereum's staking ETF, even if this approval is granted, it is unlikely to reverse Ethereum's decline. The reason is that the funding structure has fundamentally changed: Bitcoin has become the 'favorite' of institutional investors. Even if Ethereum receives good news, funds are only likely to engage in short-term speculation, making it difficult to change its long-term weak trend. It is also worth noting that Trump's proposed 'BTC Strategic Reserve' plan makes no mention of Ethereum, indicating that Ethereum has failed to leverage policy benefits and is instead being continuously siphoned off by Bitcoin.
5. Retail Investor Mindset: Panic spreads, and selling creates a vicious cycle. The last key factor is the collapse of market sentiment. The ETH/BTC exchange rate has reached a five-year low, with 90% of holders in a losing position; who would still be willing to hold? On-chain data shows that both small retail investors and large holders are frantically selling their Ethereum, fearing that asset values will drop to zero. Once this panic selling trend forms, even if there are favorable technical and fundamental conditions, it will be difficult to stop the price decline. Summary: Is there hope for Ethereum's recovery? In the short term, for the ETH/BTC exchange rate to reverse, the following three conditions must be met:
Bitcoin's upward momentum stagnates, and funds begin to flow back into the altcoin market.
Ethereum's technical upgrade has been successful, and the ecosystem has been revitalized.
Institutional investors suddenly change their attitude, such as the approval of Ethereum ETFs and a booming staking business.
However, given the current market situation, the realization of these three conditions is increasingly difficult. I remind all investors that when trying to catch the bottom, do not rush; it is more prudent to wait for market sentiment to stabilize before making decisions. If you really want to take action, remember: in a downtrend, blindly catching the bottom is not as good as waiting and observing.