What Happens to Ethereum Price If Bitcoin Crashes to $80,000?

Ethereum (ETH) shows strong signs of recovery as Bitcoin (BTC) slithered close to $100,000. However, this article explores what would happen to Ethereum price if BTC collapsed to $80,000. Can ETH still manage to retest $4,000 or will it drop lower? Let’s explore this outlook via ETH technical analysis and also by taking a look at what on-chain data shows. Are ETH whales accumulating or selling their holdings?

Ethereum Price If Bitcoin Crashes To $80,000

The four-hour chart shows that the ETH price crashed 25% since the formation of the double top on December 16. Furthermore, this drop is due to Bitcoin’s weakness and is caused by the recent crash below $100K to $95K. A high correlation between Bitcoin & Ethereum is the reason why Ethereum follows Bitcoin’s footsteps. As a result, a drop in Bitcoin to $80,000 would cause Ethereum price to crash lower as well.

The aforementioned 25% drop led by Bitcoin pushed ETH to flip the $3,539 and $3,656 support levels into resistance. Although there was a recovery bounce, lack of bullish momentum coupled with weak Bitcoin outlook, ETH rejected from $3,539, hinting that the bulls are not in control.

If this outlook continues and Bitcoin crashes to $80,000, Ethereum could easily revisit $3,000. In a worse-case scenario, Ethereum price prediction notes that ETH could revisit the $2,500 support level.

But will such a fateful crash occur for Bitcoin? What if BTC does not crash, but continues to climb higher? Let’s explore what would happen to Ethereum if Bitcoin overcomes $100,000 and restarts the bull run. Under these conditions, Ethereum price could also rally. Furthermore, on-chain metrics are showing that whales are accumulating ETH as it dropped 25% in the past week.

Whales Accumulate 240,000 ETH in a Week

Supporting this positive oultook is the accumulation of ETH done by whales holding between 10K to 100K tokens. These whales’ holdings increased from 25.02 million to 25.26 million ETH in the past week.

This massive dip-buying activity scooped 240,000 ETH worth $1.15 billion Ethereum tokens from the market and is generally a positive signal.

Ethereum’s Short-term Holders Capitulate

Based on Santiment’s 30-day MVRV indicator, which hovers around -10.72%, the short-term holders are capitulating. This indicator tracks the average profit and loss of investors who accumulated ETH in the past month and are currently sitting at an average loss of 10.72%. However, when an altcoin dips in the opportunity zone, i.e., between -10% to -20%, short-term holders capitulate, allowing long-term holders to buy the dip.

To conclude, if Bitcoin dropped to $80,000 Ethereum price could revisit the first support level at $3,000. In a worst-case scenario, ETH could crash as low as $2,500.

If we disregard Bitcoin dropping to $80,000, then Ethereum looks bullish from a technical and on-chain perspective. However, the uncertain outlook for Bitcoin price suggests that there might be an extension of the correction before BTC kickstarts a rally or slips into consolidation. Until that occurs, Ethereum price could either move sideways as a show of bulls’ strength or drop due to its high correlation with BTC. Regardless, investors must understand that the bottom is almost near.