Four factors explain why Ethereum is finally outperforming Bitcoin


The ETH/BTC exchange rate is currently weakening. We’ll also explain why.

Since February 12, Ethereum’s native cryptocurrency, Ether, has increased in value relative to Bitcoin by more than 20%.

This significant increase has mostly been caused by expectations that a spot Ether exchange-traded fund (ETF) may be approved in the US by May of this year.

But the frequently watched ETH/BTC pair has hit a historical turning point that may increase the likelihood of a drop in the days ahead. Here’s a closer look at these bearish scenarios.

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The bearish fractal returns of Ethereum

Notably, Ether is circling around its 1.00 Fibonacci retracement level around 0.06044 BTC on the four-hour ETH/BTC chart that is displayed below.

Furthermore, after rising above 70, its relative strength index (RSI) reading has become “overbought,” suggesting a corrective scenario.

These two pieces of technical data together resemble the January 2024 fractal, which was the precursor to an 11.65% decline in the price of ETH/BTC.

“Ether hovers near its 1.00 Fibonacci retracement level at 0.06044 BTC, while an ‘overbought’ RSI above 70 signals a potential correction. This scenario mirrors the January 2024 fractal, preceding an 11.65% decline in ETH/BTC. With an overbought RSI and previous resistance, investors may face buying weariness, potentially leading to a decline towards the 0.786 Fib line at 0.058 BTC.”

In particular, the probability of investors experiencing buying weariness is increased when an overbought relative strength index is paired with a previous resistance level.

The value of Ethereum in relation to Bitcoin may decrease as a result of this situation, starting with a drop towards the 0.786 Fib line at 0.058 BTC.

A pattern of rising wedges appears

Though a bearish confirmation is still needed, the rising wedge pattern might further weaken the ETH/BTC exchange rate, with a target drop of 10.85% to 0.053 BTC by March from the current position.

Rising wedge formations, which indicate a change in momentum from upward to downward, are typically regarded as bearish reversal indications.

A falling triangle may be seen on the weekly chart for ETH/BTC

Bearish reversal is evident on the weekly timeframe chart of Ether as it fails to close above the resistance of a multiyear falling trendline.

It’s interesting to note that the 50-week exponential moving average (50-week EMA; the red wave) for ETH/BTC and this trendline match.

In the upcoming weeks, Ether’s attempts to rise may be impeded by this resistance combination, increasing the likelihood that the cryptocurrency would seek a retreat towards 0.051 BTC, a level that has seen notable rallies in the June 2022 and October 2023 – January 2024 sessions.

Ethereum vs Bitcoin
Ethereum vs Bitcoin

Ethereum whale holdings decline

Additionally, a notable deviation has been noted in the Bitcoin and Ether holdings of prominent investors, also known as “whales.”

For example, according to Glassnode data, the number of entities holding 1,000 – 100,000 ETH has decreased dramatically in February.

This basically means that institutional investors are more interested in Bitcoin than in Ether, which supports the negative argument for ETH/BTC in addition to the technical aspects.

Recent data reveals a decline in Ethereum whale holdings, indicating a potential shift in wealth distribution within the network.

This trend suggests that large holders are reducing their positions in Ethereum, possibly diversifying their portfolios or responding to market dynamics.

The impact of these changes extends to market sentiment and price movements, prompting investors and analysts to closely monitor the evolving landscape.

Such shifts in whale holdings can have implications for the long-term outlook of Ethereum, influencing market stability and liquidity.

Investors are keenly observing these developments to make informed decisions in response to the evolving dynamics of the cryptocurrency.

Ethereum whale holdings decline
Ethereum whale holdings decline

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Written by
Rock Buivy
Over the years, I've dedicated countless hours to researching and analyzing various crypto betting platforms, understanding their features, strengths, and weaknesses. This knowledge has allowed me to produce in-depth, well-rounded reviews that help users make informed decisions when it comes to choosing the right platform for their needs.