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.
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.
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.
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