As we take a deep dive into the volatile world of cryptocurrencies, a question that’s been at the forefront of discussions is: Can the ETH price reverse course against Bitcoin? Ethereum’s native token, Ether (ETH), has been on a downswing against Bitcoin (BTC) for the past 15 months, hitting a low not seen since Ethereum transitioned to proof-of-stake (PoS). The question remains, will this trend persist through the rest of 2023?
Dissecting the ETH/BTC Pair
The ETH/BTC pair hit a low of 0.056 BTC recently, breaking its 200-week exponential moving average (200-week EMA; represented by the blue wave) near 0.058 BTC. This move has raised concerns of a potential downside into 2023. Historically, the 200-week EMA has been a solid support for ETH/BTC bulls. In July 2022, for example, the pair bounced back by 75% three months after testing this wave support. On the flip side, it plunged over 25% after losing the same support in October 2020.
The Potential Outcomes
After losing its 200-week EMA as support, the ETH/BTC pair faces the risk of a similar sell-off in 2023. The next downside target appears to be its 0.5 Fib line near 0.051 BTC, a drop of about 9.5% from current levels. However, if ETH manages to regain the 200-week EMA as support, the price could bounce back towards its 50-week EMA (the red wave) near 0.065 BTC.
Bitcoin’s Bull Case Overshadowing Ethereum
Ethereum’s ongoing weakness against Bitcoin is mirrored in institutional capital flow data. Bitcoin-specific investment funds have drawn $246 million year-to-date (YTD) as of Oct. 6, according to CoinShares. In contrast, Ethereum funds have experienced capital outflows, with a loss of $104 million in the same period. This divergence is likely due to the growing excitement around a potential spot Bitcoin exchange-traded product (ETF) approval in the U.S., which is predicted to draw $600 billion. Additionally, Bitcoin’s fourth halving, slated for April 24, 2024, is also providing a boost against the altcoin market.
For those interested in keeping a close watch on these trends, the cryptoview.io application provides a comprehensive view of the cryptocurrency market, making it easier to monitor the performance of ETH and BTC.
Please note, this article does not offer investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making a decision.
