Ethereum hits 3-week high vs. Bitcoin amid Fed-led market rout

The Ethereum native token Ether (ETH), fell to its lowest level in nearly two months against the U.S. Dollar on May 6, as the turmoil in financial markets rippled through the cryptocurrency sector. ETH managed to outperform Bitcoin (BTC), with the ETH/BTC pairing hitting a three week high.

Daily price chart for ETH/BTC Source: TradingView

Merge: The impact

Many analysts credited Ethereum’s merge to proof–of-stake form proof-of–work as the main reason behind the capital rotation to Ether to Bitcoin markets including Toast.ETH. A pseudonymous analyst highlighted Ether’s ongoing supply decrease as another reason why ETH is currently outperforming BTC.

Since December 2020, Ethereum has seen a significant increase in its value against Bitcoin.

Weekly price chart for ETH/BTC Source: TradingView

Eliezer Ndinga is a research leader at 21 Shares, a Zug-based crypto ETP provider. He suggested that liquid staking could also play a significant role in reducing sell side pressure.

Liquid staking provides the main cushion, which is why Lido has grown to be the biggest DeFi app on TVL, up 51% from $11.9B and above $18B, as of writing. It’s still an amazing ride. https://t.co/9HgBsu2PC6
Ksli is a hiring! (@elindinga) May 5, 2022

ETH/BTC upside prospects

Technical indicators suggest that ETH/BTC could rise further in May, but it faces a wider correction overall due to its rising wedge pattern.

After testing the wedge’s support level at the lower trendline on April 30, the pair bounced and is now moving towards the higher trendline (around 0.088) as its interim upside target.

Related: Bitcoin’s treacherous road to becoming a risky asset: Analysts investigate

However, rising wedges are often bearish reversal patterns so ETH/BTC’s chances of breaking lower in the long-term remain higher.

ETH/BTC daily chart with ‘rising wedge” setup Source: TradingView

Technical analysis dictates that rising wedge breakdowns lead to the price plummeting to a level equal to the pattern’s maximum height measured from the breakdown point (i.e. 0.064-0.069).

ETH/USD bearish scenario

Technical signals point to more negative prospects for Ether in coming months. A “bear flag pattern” projecting ETH’s decline towards $1,700 Q2, down approximately 40% from May 6.

Weekly price chart for ETH/USD with ‘bear flag setup Source: TradingView

Ether could retest $4,000. If the flag’s trendline is lower, Ether could rebound.

com. You should do your research before making any investment or trading decision.
https://cointelegraph.com/news/ethereum-hits-3-week-high-vs-bitcoin-amid-fed-led-market-rout

Charles Griffin

Charles Griffin – Business and Transportation I am Charles Griffin with more than 10 years of experience in the Stock market industry, I am energetic about Finance and Business news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of Magnewspress.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Business News category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.  

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