Bitcoin’s momentum around the $44,000 mark has not significantly impacted Ethereum’s (ETH) price. While Bitcoin successfully breached the $42,000 resistance and even aimed for $45,000, Ethereum struggled to surpass its corresponding resistance level of $2,300. Consequently, Ethereum’s performance relative to Bitcoin has been declining, with the ETHBTC ratio reaching a new low.
Bitcoin’s Rising Dominance Might Turn Bearish
Recently, Bitcoin has seen a significant rise in its market dominance, now accounting for 55%. In contrast, Ethereum (ETH) has not maintained its momentum in line with Bitcoin, resulting in a sharp decline in the ETHBTC ratio. The ratio has fallen to levels last seen in June 2022, currently trading at 0.05152. This decline is due to Ethereum’s inability to match the price movements of Bitcoin.
According to QCP Capital’s analysis, with BTC nearing $45K in anticipation of the official announcement on spot ETF in the second week of January, the question arises as to how much of this news is already factored into the price.
They note that the potential to revisit the $69K all-time high depends on the actual flows brought in by the ETF in its initial weeks of trading. Absent significant inflows, QCP Capital suggests that this scenario could lead to a classic “sell-the-news” event in 2024.
Interestingly, Bitcoin’s downturn might bring an influx of capital toward altcoins, creating a bullish scenario for ETH price. Recent market metrics indicate a shift in sophisticated traders’ focus from Bitcoin to Ethereum. While Bitcoin has surged 60% this quarter, Ethereum has seen a more modest 35% gain.
However, Ethereum’s potential is highlighted by a 30% increase in its futures’ open interest on the CME, outpacing Bitcoin’s 20% growth. As the ETHBTC ratio recovers from its recent low, buyers may soon target maintaining a level above $2,300.
What’s Next For ETH Price?
Ether’s price recently surged past $2,300 level but buyers failed to hold momentum near this level due to an increase in selloff. As a result, ETH price declined below the 23.6% Fib channel, hovering just above the EMA20 trend line. As of writing, ETH price trades at $2,277, surging over 1.6% from yesterday’s rate.
Buyers have strongly defended a decline below the EMA20 level, aiming for a potential completion of a bullish ascending triangle pattern if it maintains above this level. The surging moving averages and a high RSI, hints at strong bullish momentum. The anticipated target following a surge above $2300 is $2,464, though resistance is expected near $2,500.
Conversely, a drop below the $2,200 level would suggest a rising dominance for Bitcoin, giving bears an upper hand to open ETH’s short positions. A further drop will consolidate the price around $2K.
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