Ether (ETH) is down approximately 5.5% against Bitcoin (BTC) over the past week, and a bearish continuation setup currently indicates the risk of deeper losses in the future.

Key conclusions: :

• A bear flag pattern on ETH/BTC indicates a possible 10% decline towards 0.026 BTC in May.
• Ethereum’s record staking rate of 32.33% reduces liquid supply.

Ether bear flag threatens 10% correction

The ETH/BTC ratio has been forming a bear flag pattern since February, consolidating in a parallel ascending channel after a piercing move lower.

In technical analysis, bear flags are usually viewed as continuation patterns. Analysts set a downside target by taking the amount of the previous decline and forecasting it lower than the point at which price breaks below the flag’s lower trend line.

ETH/BTC daily chart. Source: TradingView

Using this method, the measured target drop for the ETH/BTC pair in May will be close to 0.026 BTC, approximately 10% below the current level.

It is worth noting that a similar bear flag collapse earlier this year preceded a decline of around 15%, suggesting that the current setup may once again favor Bitcoin over Ether in the near future.

Conversely, a bearish breakdown setup could be postponed if ETH/BTC bounces off the flag’s lower trendline, opening the door to a recovery towards the upper line near 0.032 BTC in May.

Ethereum staking rate reaches record high

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

According to the data resource, the network’s staking ratio reached an all-time high of 32.33% on April 21, with approximately 39 million ETH locked in 816,578 validators. Token terminal.

Ethereum staking factor. Source: Token Terminal

This amount is approximately $90.26 billion and marks the first time that over a third of Ethereum’s circulating supply has been transferred to the network.

Earlier this month, the Ethereum Foundation achieved its 70,000 ETH staking goal by moving more of its resources into profit-generating positions instead of potential sell-side supply.

Meanwhile, BitMine Immersion Technologies currently holds 4.976 million ETH, or 4.12% of the total supply, with approximately 3.334 million ETH already staked via its validator network.

Overall, this means that less ETH is available for busy trading. This could reduce selling pressure and support dollar prices over time, especially if demand continues to raise and available supply decreases.

Related: Ethereum Whale opens bets of $90 million while the ETH price chart is at $3.2k. USD

Ether is lagging behind Bitcoin, in part because Ethereum’s “ultrasonic money” thesis has weakened, while Bitcoin continues to benefit from accumulation by companies like Strategy and its accelerating integration into Wall Street wallets.