As a seasoned researcher with years of experience in the ever-evolving cryptocurrency market, I have witnessed the rise and fall of numerous digital assets. The current underperformance of Ethereum (ETH) against Bitcoin (BTC) and other large cap altcoins has been intriguing, to say the least.
In contrast to the introduction of Spot Ethereum Exchange-Traded Funds (ETFs), the price of Ether ($ETH) has persistently lagged behind Bitcoin and several major altcoins in terms of performance. Could this trend be set to reverse soon?
Ethereum still the dominant layer 1 for smart contracts
During the previous market uptrend, Ethereum (ETH) served as a leading example. Currently, it ranks second in terms of total market value among cryptocurrencies, with strong potential to take over as the primary Layer 1 blockchain for a large number of decentralized applications (dApps) in the future.
Despite transitioning to a proof-of-stake consensus mechanism, Ethereum’s journey has been marked by challenges such as struggling to achieve scalability and speed, as well as facing stiff competition from Solana. These factors have made the path forward for Ethereum quite difficult.
To put it simply, Ethereum remains the leading platform for smart contracts, boasting a significant number of developers, and it’s unlikely that the value of Ether (ETH) will consistently drop compared to other significant cryptocurrencies.
$ETH bounces from critical support
Today seems promising for ETH prices as it’s already up by around 2% and has managed to regain over 23% since the turbulent Monday of August 5th, when the Japanese stock market experienced a significant drop.
As a researcher, I’ve noticed that the dip for Ether has touched its bull market support trendline, reaching as low as $2,120 – a point also fortified by strong horizontal support. Now, it appears to be rebounding from the 0.618 Fibonacci level, hinting at an upward trajectory against the dollar.
Long, downward trend for $ETH against $BTC
Instead, let’s focus on the significant pairing between ETH and BTC, as this chart might hold the most crucial insights. On the daily chart, we notice that ETH has been on a steady decline against BTC since early September 2022. Intriguingly, during the Japan crash, the price of ETH dropped below the downward trendline, but the ETH supporters managed to push the price back within this range again.
ETH/BTC pair arrives at pivotal level
On a weekly scale, it’s clear that while Bitcoin ($BTC) has been moving sideways and downwards, Ethereum ($ETH) continues its upward trajectory. Now, we’ve hit a significant level of support for ETH. Whether the price recovers from here or breaks the support depends on market conditions.
Considering that ETH has experienced a 54% drop relative to BTC from its peak in mid-December 2021, it could potentially signal a reversal of this downward trend. Furthermore, the stochastic RSI is showing signs of bottoming out, which could lead to a crossover and provide additional momentum for ETH.
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2024-08-16 14:28