Is Ethereum Facing its High Tide Against Bitcoin?

Ethereum, better known as Ether (ETH), has seen an over 20% surge against Bitcoin (BTC) since February 12. This impressive upturn is catapulted by the news surrounding a prospective approval of a spot Ether exchange-traded fund (ETF) in the United States this coming May.

However, as we take a deeper look at the technical bit, the ETH/BTC pair has arrived at a historic crux point, potentially highlighting the surge with a looming correction season.

Following four significant bearish shift signals, let’s break down why the tide might be turning for Ethereum.

Ethereum’s Bearish Curve

Over the past few weeks, the ETH/BTC chart shows Ethereum floating around its 100% Fibonacci retracement level at 0.06044 BTC. Yet, the relative strength index (RSI) reading is presently hanging in the overbought territory of over 70, a potential correction scenario indicator.

This bearish setup is similar to a pattern from January 2024, which followed a substantial 11.65% drop in ETH/BTC rates. The convergence of an overbought RSI with a historical resistance level suggests reduced investor confidence. It shows a potential downturn in Ethereum’s value relative to Bitcoin.

Rising Wedge Pattern

A rising wedge pattern strengthening the possibility of a bearish shift can’t go unnoticed. Typically, this model is viewed as a bearish reversal indicator implying a forthcoming shift from an upward momentum to a downward trend. Upon confirmation, this pattern could depress the ETH/BTC exchange rate, further targeting up to a 10.85% decrease from its current position come April.

Descending Triangle on the Weekly Chart

Focussing on the weekly chart, Ether paints signs of a bearish reversal as it struggles to definitively pass its multi-year descending trendline resistance. Interestingly, this resistance level aligns with ETH/BTC’s 50-week exponential moving average (50-week EMA).

This resistance combination could curb Ether’s upward attempts in the forthcoming weeks, making Ether potentially more susceptible to a retraction towards 0.051 BTC.

Ethereum Whale Holdings Take a Dive

A significant forking is clear in Ether and Bitcoin holdings among major investors, often referred to as ‘whales’. According to Glassnode, the number of entities holding 1,000 – 10,000 ETH fell significantly in February. In stark contrast, Bitcoin entities holding over 1,000 BTC have increased, a trend attributed to the surge in capital influx into recently introduced ETFs.

Typically, it appears that between the two cryptocurrencies, institutional investors have leaned more towards Bitcoin over Ether giants. Sequentially, increasing the likelihood of ETH/BTC’s bearish shift.

Despite this prediction of a potentially gloomier market for ETH, it’s important to remember that every investment and trading move involves risk. As always, it is wise for investors to conduct their research before making any financial decisions.

All in all, the Cryptocurrency market is baffling yet exciting, with a touch of an eternal dance of peaks and valleys. Where Ethereum will go next is a journey that will continue to captivate us all.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.