PATNA (CoinChapter.com)— On May 23, the cryptocurrency market experienced a sudden price correction that sent digital assets crashing. Bitcoin (BTC) and Ethereum (ETH) were among the hardest-hit tokens. However, the ETH/BTC pair exhibited notable resilience during the recent crash.
The ETH/BTC pair, which measures Ether’s performance relative to Bitcoin, is a crucial barometer for market participants. A rising ETH/BTC ratio indicates stronger performance for Ether compared to Bitcoin, reflecting investor confidence and shifting preferences within the cryptocurrency ecosystem.
ETH/BTC Relation and Market Impact
The recent surge in this pair suggests growing optimism around Ethereum, particularly in anticipation of the potential approval of a Spot ETH ETF.
The rise in ETH/BTC indicates that, despite the broader market downturn, Ether is gaining favor among traders and investors. Anticipating a spot Ether ETF approval drives this shift, seen as a major catalyst in current market sentiment.
An ETF would provide institutional and retail investors with a regulated, accessible way to invest in Ether, likely leading to increased demand and higher prices, similar to how BTC reacted to the approval of spot Bitcoin ETFs.
The market’s forward-looking nature drives investors to position themselves ahead of this decision, pushing the ETH/BTC ratio higher.
Additionally, Ethereum’s utility contrasts with Bitcoin’s primary use as a store of value, making Ether an attractive investment for those seeking exposure to the broader applications of blockchain technology.
The recent price action marks a significant shift. The chart highlights a descending trendline that has served as a key resistance level since Sept. 2022. The trendline captures a series of lower highs, symbolizing sustained selling pressure on Ether relative to Bitcoin.
The ETH/BTC pair made a strong upward move, attempting to break above this descending trendline. If successful and sustained, this breakout attempt could signal a reversal of the long-term downtrend.
However, the trendline resistance proved too much for the pair, with ETH/BTC reversing its rally on May 24. Moreover, the relative strength index remained neutral, albeit near the overbought threshold, with a score around 69 on the daily charts.
ETH Price Fails To Capture Immediate Resistance
Following the recent market correction, ETH price failed to hold above the $3,800 price as the token plunged more than 5% to reach a daily low near $3,630 on May 24.
If the downtrend continues, ETH price could test the support level near $3,580. Failure of the immediate support level might result in Ether’s price dropping to its 20-day EMA (red wave) support near $3,340.
Conversely, a recovery rally would find ETH price facing resistance near $3,990, flipping which would help the token target the resistance near $4,300 before correcting.
The RSI for ETH remained neutral, with a score of 67.12 on the daily charts.
