Ethereum's 30% Plunge: Supply Surge Drives ETH to Four-Year Low Against Bitcoin

Coin WorldTuesday, Mar 4, 2025 6:00 am ET

1min read

Ethereum's recent price decline has sparked concern among investors, with the cryptocurrency experiencing a significant downturn of over 30% within a month. This drop has driven the ETH/BTC ratio to a four-year low, highlighting Bitcoin's dominance in the market. Amidst escalating selling pressure, the Ethereum network has seen a substantial increase in supply, with over 66,748 new ETH added, leading to a weaker market demand.

According to Ultra Sound Money, the uptick in circulating supply is a principal factor in Ethereum's price decline, as more tokens flood the market without corresponding demand. Ethereum's price has dropped 30% this month, with increased supply pressuring ETH's performance against Bitcoin. Key levels to monitor are $2,000 and $2,223.

ETH's recent price action has revealed notable volatility, particularly from February onwards. Following a relatively stable early month, Ethereum experienced a steep decline after breaking below crucial support levels on February 25. Now trading around $2,089, the cryptocurrency has returned to values not observed since December 2023. This decline has further exacerbated the ETH/BTC ratio, which now stands at 0.02, marking its lowest since January 2021. Such a plunge illustrates that Ethereum is currently underperforming compared to Bitcoin.

A critical factor in this price drop is the surge in Ethereum's circulating supply. A recent report indicates that Ethereum has seen a net addition of 66,748.91 ETH, valued over $140 million at current prices, in just the last month. This increase in supply typically exerts downward pressure on prices, especially when market demand fails to match such growth. The current trajectory suggests that unless demand picks up significantly, the excess supply will continue to weigh on Ethereum's price.

Technical analysis of Ethereum's daily performance reveals a concerning trend: ETH is trading below the lower trend line of a long-term descending channel. Such a breach indicates potential acceleration in selling activity, raising concerns for investors. If this bearish momentum continues, there is a strong possibility that Ethereum could fall below $2,000, potentially reaching levels as low as $1,922. Conversely, if buying interest resumes, there remains a chance for the

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