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How low can ETH price drop versus Bitcoin amid the DeFi contagion?
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How low can ETH price drop versus Bitcoin amid the DeFi contagion?

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by Virtuse
27. June 2022
How low can ETH price drop versus Bitcoin amid the DeFi contagion?

thereum’s native token Ether (ETH) has declined by more than 35% against Bitcoin (BTC) since December 2021, with a potential to decline further in the coming months.

ETH/BTC weekly price chart. Source: TradingView

ETH/BTC dynamics

The ETH/BTC pair’s bullish trends typically suggest an increasing risk appetite among crypto traders, where speculation is more focused on Ether’s future valuations versus keeping their capital long-term in BTC.

Conversely, a bearish ETH/BTC cycle is typically accompanied by a plunge in altcoins and ETH’s decline in market share. As a result, traders seek safety in BTC, showcasing their risk-off sentiment within the crypto industry.

Ethereum TVL wipe-out

Interest in the Ethereum blockchain soared during the pandemic as developers started turning to it to create a wave of so-called decentralized finance (DeFi) projects, including peer-to-peer exchange and lending platforms.

That resulted in a boom in the total value locked (TVL) inside the Ethereum blockchain ecosystem, rising from $465 million in March 2020 to as high as $159 billion in November 2021, up more than 34,000%, according to data from DefiLlama.

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