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Ether (ETH) versus Bitcoin has been in a negative trend for at least 3 years.
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New competitors joined the race, making the rise of ETH more difficult.
Ether (ETH), the Cryptocurrency of the Ethereum network, continues to show good performance in its dollar price and shows its strength against bitcoin (BTC), the main currency in the market.
In the last hours, the price of ETH measured in bitcoin experienced a reboundafter having reached its lowest level since 2021, as seen in the following graph of TradingView.
In this context, some members of their community are excited that this rebound is the beginning of a change of direction. But, Is this something real or just temporary optimism in the middle of a bearish trend that has been going on for 3 years and is not over yet?
In this regard, the trader identified as jimmyboss He believes that “the moment I have been talking about for so long has finally happened” and adds: “Dominance is declining, ETH is strengthening against bitcoin and money is starting to flow into altcoins. Come on, Ethereum, keep moving forward; “We have waited so long for this!”
For his part, the cryptocurrency market analyst recognized as @polaris_xbt stated: “ETH/BTC is bouncing from major support. 0.034-0.030 is the area where the highest volume was traded since the inception of ETH. This price is likely to be adequately defended. The ETH cycle is beginning.”
To argue his opinion, he shared a graph where the levels of support and resistancetwo important metrics for technical analysis.
On the left of the image, there is a volume by price indicator, which shows the areas where the most ETH/BTC has been exchanged over time. Also highlighted is a box that says “Most ETH/BTC was traded here BY FAR”, referring to the area around the 0.031 level, which coincides with the historical high activity level (POC Macro, red line).
Some traders are optimistic about this ETH rally. Source: Account X of @polaris_xbt.
Beyond this enthusiasm, it is enough to observe the graph carefully to notice that ETH/BTC price is near the bottom of the bearish channelso, continuing with the general trend, the negative trend continues.
If the channel holds, this could be a sign of less dominance for ETH compared to BTC in the coming months. Maybe in the future I can break this trend but, At the moment, the technical analysis shows otherwise.
Bearish channel in the price relationship between ETH and BTC. Source: TradingView.
Despite being the second most valuable cryptocurrency on the market, ETH faces significant challenges due to direct competition from networks such as Solarium and changes in its own ecosystem with layer 2 solutions.
In the case of Solana, it offers users greater speed of operations and lower commissions. Thus, it has managed to capture an important part of the market despite registering some disruptions to your network due to technical problems.
It is worth noting that the appearance of layer 2 solutions in Ethereumwhich significantly reduced commissions, They decrease the buying pressure on ETH, affecting its price.
This occurs because, if demand moves to that environment, the purchasing pressure of ETH is reduced since fewer users need that asset to pay gas rates.
The truth is that the recent rally against BTC generates expectations, but The bearish trend in technical analysis suggests maintaining caution in the short term.
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