Ethereum risks 10% decline versus Bitcoin despite record ETH staking

Ether (ETH) has fallen about 5.5% against Bitcoin (BTC) over the past week, and a bearish continuation setup now points to the risk of deeper losses ahead.

Key takeaways:

• ETH/BTC’s bear flag pattern points to a possible 10% drop toward 0.026 BTC in May.

• Ethereum’s record 32.33% staking ratio is tightening liquid supply.

Ether’s bear flag risks 10% correction

The ETH/BTC ratio has been carving out a bear flag pattern since February, consolidating inside a rising parallel channel after a sharp downside move.

In technical analysis, bear flags are typically viewed as continuation patterns. Analysts derive the downside target by taking the height of the previous decline and projecting it lower from the point where price breaks below the flag’s lower trend line.

Using that method, the ETH/BTC pair’s measured downside target comes in near 0.026 BTC, about 10% below current levels, in May.

Notably, a similar bear flag breakdown earlier this year preceded a roughly 15% decline, suggesting the current setup could once again favor Bitcoin over Ether in the near term.

Conversely, the bearish breakdown setup may get postponed if ETH/BTC rebounds from the flag’s lower trend line, opening the door for a recovery toward the upper boundary near 0.032 BTC in May.

Ethereum staking ratio hits record levels

Ethereum’s fundamentals are strengthening even as ETH continues to lag Bitcoin.

The network’s staking ratio hit a record 32.33% on April 21, with about 39 million ETH locked across 816,578 validators, according to data resource Token Terminal.

That amounts to roughly $90.26 billion in staked value and marks the first time more than one-third of Ethereum’s circulating supply has been committed to the network.

Earlier this month, the Ethereum Foundation completed its 70,000 ETH staking target, shifting more of its holdings into yield-generating positions instead of potential sell-side supply.

Meanwhile, BitMine Immersion Technologies now holds 4.976 million ETH, or 4.12% of total supply, with around 3.334 million ETH already staked through its validator network.

Overall, it means less ETH is available for active trading. That can reduce selling pressure and support prices in dollar terms over time, especially if demand keeps rising while available supply keeps shrinking.

Related: Ethereum whale opens $90M long bets as ETH price chart eyes $3.2K

Ether has lagged behind Bitcoin partly because Ethereum’s “ultrasound money” thesis has weakened, while Bitcoin continues to benefit from accumulation by firms like Strategy and its accelerating integration into Wall Street portfolios.