Ethereum ($ETH) nears breakout – but can it outperform Bitcoin ($BTC)?

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As a seasoned crypto investor who has seen the ups and downs of this volatile market since its inception, I must say that the recent surge in Ethereum ($ETH) is certainly intriguing. The gains made by older altcoins like $XRP and $ADA are also hard to ignore. However, my optimism about a potential breakout for ETH and a reversal of its long-standing downward trend against Bitcoin ($BTC) is tempered with a healthy dose of caution.

Among the leading cryptocurrencies, Ethereum ($ETH) has shown exceptional performance in the last 24 hours. Additionally, older altcoins such as Ripple‘s XRP ($XRP) and Cardano‘s ADA ($ADA) have experienced significant growth in recent days. This leads to the question: Is Ethereum preparing for a breakout, potentially ending its prolonged downtrend relative to Bitcoin ($BTC)?

Is the latest surge for ETH/BTC just a retest of resistance?

Since as far back as 2017, the price of ETH has generally decreased when compared to BTC (ETH/BTC pair). This trend has persisted for quite some time, making it over three years now for the second-largest cryptocurrency by market cap.

2021 saw significant advancements for ETH in reducing its losses relative to BTC during the bull market. However, starting from 2022, ETH has experienced a prolonged downturn, ending in a steep fall out from the bottom of a two-year sliding trendline channel.

This decrease in the Ether (ETH) price relative to Bitcoin (BTC) this fall has dropped it beneath a significant support point at 0.0335 BTC. Given that Stochastic RSI indicators on the weekly chart have now crossed back downwards, the recent Ethereum recovery might simply be a re-test of the major support level, potentially transforming it into formidable resistance.

$ETH price heads to potential wedge pattern breakout

Despite some potential uncertainties on a daily basis for the ETH/USD pair, the broader weekly picture appears more optimistic. The Ethereum price is currently within a wedge formation, which typically indicates a continuation of an uptrend. As such, it could be predicted that the price might burst through the upper boundary of this pattern.

One thing that is perhaps not in $ETH’s favour is that the Stochastic RSI indicators are starting to roll over. This does not necessarily mean that upside price momentum is definitely going to desert $ETH, because the indicators could still climb higher, but it is certainly something for $ETH bulls to bear in mind.

ETH/SOL is perhaps the biggest concern for $ETH bulls

It’s worth noting that the surge in the Solana ($SOL) to Ethereum ($ETH) price could be a cause for concern among ETH bulls. For most of 2024, this pair had been trading within a range, but recently, it has broken out favoring Solana, Ethereum’s main layer 1 competitor. The breakout reached an all-time high for $SOL against $ETH, and the price continues to climb higher.

For potential future growth in the ongoing bull run, the Fibonacci extension levels suggest that the Ethereum (ETH) price could reach 0.09 and 0.141 respectively. Given Solana’s (SOL) impressive performance so far against ETH, it looks poised to climb even higher.

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2024-11-25 15:05