Ethereum loses key support level as ETH price drops to two-month low against Bitcoin

The native Ethereum Ether token ( ETH ) grew by more than 15% in the first twelve days of October. But, compared to Bitcoin ( BTC ) 30% ...


The native Ethereum Ether token (ETH) grew by more than 15% in the first twelve days of October. But, compared to Bitcoin (BTC) 30% earnings over the same period, the second largest cryptocurrency is currently in a downtrend when the price is in BTC.

Through October (and Q4 2021), the ETH / BTC exchange rate plunged more than 12%, hitting 0.060215 BTC for the first time in more than two months on Tuesday.

ETH / BTC daily price table. Source: TradingView.com

The decline also pushed ETH / BTC below one of its oldest support areas, the 200-day exponential moving average (200-day EMA; the orange wave), as shown in the chart above. This increases the risk of further downside with 0.055304 BTC serving as the next possible target.

Bitcoin dominance rises on ETF hopes

More evidence of ETH / BTC weakness has come from Bitcoin’s growing dominance in the crypto market.

In detail, the Bitcoin Dominance Index (BTC.D), which measures the capitalization of the flagship cryptocurrency relative to the rest of the crypto market, fell from 42.39% on October 1 to 46.64% on October 12. On the other hand, the dominance of Ethereum (ETH.D) fell from 18.15% to 17.57% over the same period.

Daily chart of the Bitcoin Dominance Index. Source: TradingView.com

This shows that more capital stolen / turned to the Bitcoin market than altcoins until October.

Related: Institutional Crypto Products Record AUMs As Investors Crowd In Bitcoin

Bitcoin’s growing dominance coincided with expectations that the United States Securities and Exchange Commission (SEC) would approve four Bitcoin-based exchange-traded funds (ETFs) within weeks. The applicants are Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust and Kryptoin Bitcoin ETF.

SEC Chairman Gary Gensler suggested an optimistic outcome for Bitcoin ETFs despite the securities regulator’s history of rejecting similar requests for eight consecutive years. Gensler noted that this time, however, the Bitcoin ETF applicants filed under the Investment Companies Act of 1940, which offers better protection to investors.

Earlier this week, two “light” Bitcoin ETFs started to negotiate in the United States, named Invesco Alerian Galaxy Crypto Economy ETF under the ticker SATO and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). However, the funds invest 80% of their assets in companies related to crypto, and not in Bitcoin itself.

SATO ETF price chart 15 minutes. Source: TradingView.com

The SEC has also approved a third crypto equity ETF. Nicknamed the Volt Crypto Industry Revolution and Tech ETF (BTCR), the fund will be exposed “to entities that hold the majority of their net assets in bitcoin or derive the majority of their income from mining, lending or trading bitcoin.”

Is Bitcoin Going “Crazy”?

James Seyffart, ETF analyst at Bloomberg Intelligence, noted the news would be “very bullish” for Bitcoin. Likewise, independent market analyst Lark Davis also predicted “crazy” market reactions if the SEC approves a Bitcoin ETF with real BTC exposure.

So it appears speculation over Bitcoin ETF approvals has increased traders’ appetites for the best cryptocurrency in recent days, with BTC outperforming its main rivals, including Ether.

Nonetheless, Ethereum benefits from a strong ecosystem of decentralized applications and remains the key force behind the booming decentralized finance (DeFi) and non-fungible token (NFT) sectors.

David Gokhshtein, founder of Gokhshtein Media and PAC Global, Noted that Ethereum’s healthy network effect could send Ether to $ 10,000 by the end of this year. Meanwhile, like Cointelegraph covered, a continued tightening of supply in the Ethereum market should remain a major talking point for bulls going forward.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.