Ethereum Faces Crisis? ETH Drops to 5-Year Low Against Bitcoin!

Ethereum (ETH) has been going through a tough phase, as its value is going down against Bitcoin. The ETH/BTC ratio dropped to 0.02260. This has been the lowest level in the last 5 years of Ethereum. According to the charts, Ethereum traded today was at $1,894, which is 5% lower the last week and has declined around 17.94% from last month. This drop has started intense discussions among investors. Some believe Ethereum’s dominance has weakened as now more users and developers are moving to Layer-2 solutions, which reduces activity on the main network. 

However, others argue that ETH still has strong long-term potential, especially as staking continues to grow and upcoming network upgrades could enhance its functionality.

Looking ahead, Ethereum’s price prediction remains uncertain. A strong recovery could be triggered if ETH finds solid support and broader market conditions improve. But if selling pressure continues, ETH may struggle to reclaim higher levels in the near term.

Ethereum’s Fee Revenue Plunges 99%

The biggest challenge that Ethereum is facing right now is the massive drop in transaction fees. It has dropped down to 99% in just six months. This decline is mainly due to the rise of Layer-2 scaling solutions, which handle transactions off-chain to make them faster and cheaper. While this is great for users, it also raises concerns about Ethereum’s long-term financial sustainability and reliability, as the main network is earning far less in fees. Nic Carter, a crypto analyst, has stated that Ethereum’s current state is not in the right condition and could fall from its current position, which might make investors lose interest , as many projects are now launching their independent networks instead of relying on Ethereum’s infrastructure. 

Bearish Outlook as Investors Seek Solutions

Investment banks are taking note of Ethereum’s struggles. Standard Chartered has recently cut down its ETH price target from $10,000 to $4,000, showing a shift in institutional investors’ sentiments. However, some experts believe that Based Rollups—a new form of Layer-2 scaling solution—could help Ethereum regain lost value by redistributing fees more effectively to the main network. Crypto analyst Adam Cochran has suggested that these rollups can “fundamentally change Ethereum’s structure,” which will allow the network to recover some of its lost transaction fees and to hold its position and dominance in the market.

Conclusion: Is Ethereum Still a Reliable Investment?

Ethereum has been facing growing concerns about its performance and future. The ETH/BTC ratio has hit its lowest level in nearly five years, and Ethereum’s fee revenue has jumped to 99% over the past six months. These factors have divided investors’ sentiment making some believe that Ethereum has lost its dominance, while others argue that ETH still has strong long-term potential if it can adapt to market shifts. While this has helped reduce congestion and lower transaction fees, it has also cut into Ethereum’s primary revenue source, raising concerns about the network’s sustainability.

Meanwhile, competition is growing. Many new projects are launching independent blockchains, reducing Ethereum’s role as the go-to smart contract platform. Crypto analyst Nic Carter described Ethereum’s situation as being “buried in an avalanche of its tokens”, meaning that instead of strengthening Ethereum’s ecosystem, many projects are choosing to create their own networks rather than relying on Ethereum’s infrastructure.