Ethereum Plummets 40% to 2023 Low Amid Market Slump

Ethereum, the leading altcoin, has experienced a significant decline, reaching its lowest point since March 2023. This downturn is part of a broader market slump, which was exacerbated by recent geopolitical events, including Donald Trump’s Liberation Day. The value of Ethereum has plummeted, signaling a steep decline in market confidence.

Adding to the bearish sentiment, the ETH/BTC ratio has dropped to a five-year low. This ratio measures Ethereum's relative value compared to Bitcoin. When it rises, it indicates that Ethereum is outperforming Bitcoin, either because Ethereum's price is growing faster or Bitcoin's price is falling. Conversely, a decline in the ratio suggests that Bitcoin is gaining strength relative to Ethereum. This shift indicates that traders are moving capital into Bitcoin, seeing it as a safer or more profitable investment despite its own price troubles.

At the time of reporting, the ETH/BTC ratio stands at 0.019, the lowest it has been in five years. This decline reflects a significant shift in market dynamics, with Bitcoin emerging as the preferred choice for investors. The negative Chaikin Money Flow (CMF) for Ethereum, currently at -0.07, confirms the coin's plummeting demand. The CMF indicator measures the volume-weighted accumulation and distribution of an asset over a set period, helping gauge buying and selling pressure. When its value falls below zero, it indicates that selling pressure is dominating.

Ethereum's CMF readings suggest that more traders are distributing (selling) the coin than accumulating it. This reflects weakening demand and is a bearish signal for the asset's price momentum. Additionally, Ethereum's Relative Strength Index (RSI), observed on a one-day chart, shows that the altcoin is currently oversold. At 25.62, Ethereum's RSI signals that the coin is deeply oversold. This presents a buying opportunity, as such lows are usually followed by a price rebound.

If this rebound occurs, Ethereum's price could regain and climb back above $1,589. If this support level strengthens, it could propel Ethereum's value to $1,904. However, this rebound is not guaranteed. If Ethereum bears maintain dominance and selloffs continue, the coin could extend its decline and fall toward $1,197.