Is Ethereum dying? Bitcoin Targets $100,000 as ETH Struggles Below $3,500

ethereum (eth) lost its three-year support against bitcoin (btc) as the most prominent cryptocurrency rallied towards its $100,000 target on Friday, November 22. eth has faced stiff resistance at $3,500 for almost four months, while competitors hit all-time highs this cycle.

<h2 class="wp-block-heading" id="ethereum-loses-favour-with-institutional-investors-etf-performance-lacklustre”>ethereum loses favor with institutional investors and ETF performance is lackluster

ethereum fell to a low of 0.03187 against bitcoin on Friday, November 22. As bitcoin moved towards the $100,000 target, ethereum price fell below the support level that has held for almost three years since 2021.

ethereum's decline against bitcoin is likely the culmination of several factors, including a lack of interest from institutional investors, a steady decline in interest from retail investors, and the shift of capital and attention to Layer 2 and Layer scaling projects. 3, among others.

The performance of the ethereum Spot ETF explains how the altcoin has failed to attract investments from institutions, while the bitcoin Spot ETF continues to outperform.

Data from Farside Investors UK shows that eth ETFs have seen negative net flows or outflows over the past six days. By contrast, bitcoin spot ETFs continue to attract billions of dollars in institutional fund flows.

Tuur Demeester, editor-in-chief of Adamant Research, told Forbes that ethereum could be “slowly dying,” indicating the shift in market dynamics and slowing institutional adoptions.

Solana challenges ethereum dominance and on-chain analytics

As the performance of the ethereum ETF struggles, the altcoin faces a challenge from its competitor, Solana (SOL). Solana's market cap gain and price rally pushed SOL into the top four cryptocurrencies, according to CoinGecko.

Solana dominates ethereum in terms of transaction volume on decentralized exchanges, DEX activity, and protocol fees generated in October 2024 and November 2024.

While ethereum price rose on Thursday and Friday of this week, the altcoin is struggling with the $3,500 resistance, and failing to break above this level could challenge the likelihood of further gains in the token.

On-chain metrics are inconclusive. While active addresses remain well below mid-August 2024 levels, the funding rate on Binance has been consistently positive since mid-September 2024.

Open interest in ethereum futures, a metric that measures interest and demand among derivatives traders, rose to $10.35 billion, according to data from Santiment. Derivatives market statistics support a bullish thesis for the altcoin. Combined with the recent surge in Ether price, further gains are likely if the altcoin successfully breaks the $3,500 resistance.

<h2 class="wp-block-heading" id="bitcoin-leads-cryptos-with-digital-gold-narrative”>bitcoin leads cryptocurrencies with digital gold narrative

ethereum is the second largest altcoin, and for most of the last decade, analysts and traders have talked about the two cryptocurrencies together. However, bitcoin has taken on the role of “digital gold,” or a token used to protect against geopolitical crises and unpredictable market events. At the same time, ethereum faces scalability issues.

ethereum's scalability issues gave way to Layer 2 and Layer 3 protocols, and its tokens have generated profits for traders in 2024. However, the base chain is slowly losing its appeal and traction among market participants.

The digital gold narrative attracted institutional attention from nations that saw fit to add bitcoin to their balance sheet, while ethereum is still working on its promise of being a “decentralized computer” for the world.

While ethereum has a larger market capitalization than Bank of America, as of November 22, the altcoin has yet to see gains in the current market cycle relative to meme coins and other cryptocurrencies like Solana.

<h2 class="wp-block-heading" id="ethereum-future-expectations-and-technical-analysis”>Future expectations and technical analysis of ethereum.

eth/btc fell to a near three-year low, to a critical support level, as seen in the chart below. The drop is significant and the pair has been trending downwards since September 2023.

Technical indicators such as the relative strength index and momentum indicators support a bearish thesis. The RSI is 31, close to the “oversold” zone below 30. This typically generates a buy signal for traders, meaning the asset is undervalued and it is a good time to buy for sidelined traders.

Failure to recover from the support level could lead to a further decline in the pair, with eth/btc falling in the coming weeks of 2024.

The daily eth/USDT price chart shows positive signs for the altcoin. eth price could see gains and recover towards the $3,500 resistance and the May 2024 peak of $3,977 if the altcoin maintains its upward momentum.

ethereum is less than 5% away from $3,500, and gains of nearly 20% could send eth testing the May 2024 peak of $3,977. The RSI is 65, well below the overvalued level above 70. green histogram bars on the moving average convergence divergence indicator support the likelihood of further gains in ethereum.

The underlying ethereum price trend is positive, and if the altcoin maintains its steady rise, $4,000, a psychologically important price level, could be surpassed in the near term.

A correction could send ethereum testing support at $3,000, a key support level for the altcoin throughout 2024. A further decline would mean ethereum finds support at the lower limit of the range at $2,111, as seen on the chart of daily prices.

Strategic considerations

ethereum enjoys a strong correlation with bitcoin, at 0.91, according to Macroaxis.com. This implies that a significant rise in bitcoin price could be followed by gains in ethereum and the altcoin price is expected to see a positive impact.

While ethereum lags behind its peers, a correction in bitcoin could add to the challenges the altcoin faces in its uphill battle with resistance at $3,500. Traders should monitor options volume and open interest on ethereum before increasing their eth positions.