Why Betting Against Ethereum Now Could Be a Mistake

Ethereum, the second-largest cryptocurrency by market cap, has been facing pressure recently. Over the past six weeks, it has fallen by 18% against Bitcoin. But despite this drop, crypto analyst Merlijn believes it’s too early to count Ethereum out. History shows that Ethereum could be on track for a strong recovery.

Ethereum’s Key Support Zone

Merlijn The Trader notes that the ETH/BTC chart has shown a steady decline over the last six weeks. However, Ethereum is now testing an important support zone, one that has often marked the start of a recovery in the past. This zone, highlighted in green on Merlijn’s chart, could be a key factor in Ethereum’s potential bounce-back.

Although the short-term trend might look negative, Merlijn points out that Ethereum still has strong momentum behind it.

The Current Dip: Just Part of the Cycle?

The current drop in the ETH/BTC ratio is not unusual, with many analysts seeing it as part of a normal market correction. This could set the stage for Ethereum’s next big rally. Right now, the ETH/BTC ratio sits at 0.03347, a 17% drop since December. However, history suggests this may not be as bad as it seems.

In 2021, the ratio fell to a similar level of 0.03 before soaring to 0.077 in just two months. During that period, Ethereum’s price surged by 111%, reaching $3,800.

Bitcoin’s Rally: Could Ethereum Get a Boost?

Bitcoin’s recent rise to $100,000 has dominated the news, but some analysts believe Ethereum could also benefit. Thomas Fahrer, co-founder of Apollo, suggests that the wider adoption of Bitcoin could help push Ethereum’s price higher, possibly to $4,000. If this momentum continues, Ethereum could follow Bitcoin’s lead in this market cycle.

Tough Time Ahead for Ethereum?

Despite the potential for growth, Ethereum still faces challenges. It recently dropped below the key $3,500 support level and is currently trading at $3,421. Moreover, the much-anticipated Ethereum Merge, which was expected to make Ether deflationary, hasn’t yet produced the results many hoped for.

Merlijn’s message is clear: now is not the time to underestimate Ethereum. With the possibility of a recovery ahead, missing out on its future potential could be a big mistake.

With market cycles ever-changing, Ethereum’s story is one of both struggle and potential—its next chapter may be more interesting than we expect.