The cost of Ether relative to Bitcoin is close to hitting a three-year record low. Yet, certain significant technical signals are pointing towards a possible bull market, and certain experts predict that ETH may see price increases against BTC in the near future.
Ethereum down 33% vs. Bitcoin since the Merge
Since the shift to proof-of-stake on Ethereum in September 2022, the USD value of Ethereum has nearly doubled. However, when compared to Bitcoin, the ETH/BTC pair has experienced a decline of approximately 33%.
In more current development, the ETH–BTC exchange rate has been declining significantly, dropping by nearly 10% over the past month to reach approximately 0.048 BTC. This figure last appeared in May 2021, based on Tradingview’s historical data.
The cost of Ether decreased by more than 11% in the last week, landing at $3,239. As a result, its relative strength index (RSI) on the daily chart dropped to 44 from the previous high of 85 on March 11. This indicates that Ether is no longer considered “overbought.”
An commonly used technical analysis tool, the Relative Strength Index (RSI), helps determine if an asset’s price has been bought or sold too heavily by comparing the size of recent price gains to losses.
Traders need to monitor the price level around $3,200 carefully. Reaching this point could trigger the closure of approximately $97 million in short positions that use leverage. If the price drops to roughly $3,170, it would result in the liquidation of over $329 million in short leverages on various exchanges based on Coinglass’s data.
In US dollars, the price of Ether has not kept pace with Bitcoin’s growth this year. Bitcoin has surged 49% since the beginning of the year, whereas Ether has only risen by 36%. Over the past quarter, Bitcoin has jumped by 56%, whereas Ether has managed to gain just 28%. According to Tradingview data.
Is it a good time to buy ETH?
Approximately two periods ago, the value of Ethereum (ETH) relative to Bitcoin (BTC) was approximately 0.048 Bitcoins. This occurred around early May 2021. However, following this point, ETH experienced a succession of two downward months. The price decreased by around 2.5% in May and plummeted over 15% to reach $2,276 by the end of June 2021.
Despite the current state of Ether’s price, there are signs it may be about to rise. This optimistic outlook is based on the recent approval of Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong, as shared by Andrey Stoychev, Nexo’s Prime Brokerage head, during an interview with CryptoMoon.
“Bitcoin has its all-important block rewards halving in days, just as Ether balances on exchanges stand at a multi-year low. That setup alone could invite more investor exposure to ETH in anticipation of bigger news from Hong Kong – namely, the approval of local Bitcoin- and Ether-based ETFs. In light of this market situation, it could be argued that Ether could perform a sharp, idiosyncratic catch-up.”
The current Ether price levels could represent a good buying opportunity, said Stoychev:
“Even at current rates, market participants could buy ETH for both a short-term catch-up play, as well a longer-term trade given all the potential developments. With that said, the key levels to watch for now in ETH/USD would be $3,300 on the topside and $3,000 on the downside.”
According to Jonathan Caras, head of communication at Levana perpetual futures protocol, the growing interest in Bitcoin ETFs and Ethereum’s expensive transaction fees have shifted the attention away from Ether.
Caras remarked that Ethereum requires a substantial boost, such as an Ethereum Exchange-Traded Fund (ETF), to bounce back according to his statement on CryptoMoon.
“Ethereum will need a catalyst to catch up, either from its own ETF or some other method of promoting institutional adoption in order to reverse the downward relative trend.”
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2024-04-15 17:58