ETH/BTC pair hits YTD low as Bitcoin dominance surges

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As a seasoned researcher with years of experience observing and analyzing the volatile world of cryptocurrencies, I find myself standing at yet another intriguing crossroads. The recent surge in Bitcoin’s price and its dominance over the market has left Ethereum trailing behind like a lost puppy looking for its way home.

This year, the exchange rate between Ethereum (ETH) and Bitcoin (BTC) has reached its minimum point, while Bitcoin has reached a fresh record high, sparking discussions about market supremacy.

Bitcoin (BTC) hit an unprecedented peak of $97,862.64 (1 a.m. EST). Meanwhile, Ethereum (ETH) is struggling to catch up, with its value relative to Bitcoin reaching the lowest point this year. Right now, Bitcoin is holding steady near $97,379.69, which has led some investors to wonder if Ethereum can pick up pace or if a wider downturn in alternative coins might be triggered by Bitcoin’s surge.

Bitcoin Dominance Rises:

As reported by CoinMarketCap, Bitcoin’s dominance in the cryptocurrency market has risen significantly to approximately 60.5%, marking an impressive increase of more than 3% within a month. This rise is largely attributed to Bitcoin reaching a new record high, driven primarily by investments poured in by institutional investors.

Today, a greater number of institutional investors are now investing in Bitcoin than they did previously. Additionally, the political climate played a significant role, specifically the election of Donald Trump as President of the United States. It’s been noted that Trump’s views on cryptocurrencies shifted over time, and Elon Musk has been seen as a proponent of cryptocurrencies in this context. (paraphrased by AI)

Conversely, Ethereum’s influence has diminished to 11.8%, falling from 13.8% in the previous month. This suggests that Ethereum hasn’t fared as well against Bitcoin this year, as evidenced by the ETH/BTC pair reaching its lowest point for the year. Examining Ethereum’s price graph over the year reveals that while its momentum has varied, it consistently trails behind Bitcoin’s bullish trend.

The Moving Average Convergence Divergence (MACD) for Ethereum suggests some difficulties maintaining momentum at significant resistance points. On the other hand, the Altcoin Season Index, currently rating 28, indicates that the market is not currently supporting altcoins. Furthermore, the decrease in the market capitalization of altcoins relative to Bitcoin suggests a movement of liquidity away from altcoins like Ethereum and towards Bitcoin.

Will Ethereum pick the pace up?

The path of Ethereum’s (ETH) recovery will be influenced by a mix of underlying factors (fundamental) and market trends (technical) in the ETH/BTC pair. Fundamentally, we see continued adoption of Layer-2 solutions, growth in decentralized finance, and increasing activity on Ethereum 2.0. On the technical side, initial support can be found at approximately 0.057 BTC, serving as a potential foundation for further growth. However, resistance levels are located at 0.065 BTC and 0.070 BTC; if Ethereum can surpass these levels, it may regain its momentum.

To bridge the gap, Ethereum (ETH) needs to surpass its current resistance points and endure ongoing platform enhancements. These actions could potentially enable ETH to reclaim its previous position relative to Bitcoin in the ETH/BTC market.

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2024-11-21 11:56