ETH/BTC Pair Hits YTD Low as Bitcoin Dominance Surges
Market Analysis
The recent surge in Bitcoin’s dominance, coupled with the altcoin market’s decline, has led to the Ethereum/BTC pair hitting its lowest level this year. Bitcoin’s all-time high of $97,862.64 has sent shockwaves through the market, with Ethereum’s performance against Bitcoin dropping to a year-to-date low.
Bitcoin Dominance Rises
According to CoinMarketCap, Bitcoin’s share of the crypto market has climbed to 60.5%, a substantial uptick of over 3% in just a month. The surge in Bitcoin’s dominance is largely driven by investments from institutional investors, who are increasingly turning to Bitcoin as a safe-haven asset.
“Today, more institutional investors are investing in Bitcoin compared to before. The second factor was the political landscape, particularly Donald Trump, who became the President-elect of the United States. Donald Trump has had an impact, and it’s said that he revised his stance on cryptocurrencies, with Elon Musk acting as a crypto-positive representative.” stated Edul Patel, CEO of Mudrex, in an interview with IndiaToday.
Ethereum’s Struggles
Ethereum’s dominance has dropped to 11.8%, down from 13.8% last month. The ETH/BTC pair hitting a year-to-date low underscores the fact that Ethereum has not performed as well as Bitcoin has this year. Looking at Ethereum’s price chart for the year, momentum has fluctuated, but it still lags behind Bitcoin’s upward trend.
Technical Analysis
The Moving Average Convergence Divergence (MACD) indicator for Ethereum points to some momentum struggles at critical resistance levels. Meanwhile, the Altcoin Season Index, which currently scores 28, shows that the market is not favoring altcoins. The drop in market capitalization of altcoins compared to Bitcoin further indicates that liquidity is shifting from altcoins, including Ethereum, towards Bitcoin.
Will Ethereum Pick Up the Pace?
The trajectory of Ethereum’s recovery depends on both fundamental and technical factors in the ETH/BTC pair. While fundamental analysis shows the ongoing acceptance of Layer-2 solutions, development in decentralized finance, and active staking on Ethereum 2.0, technical analysis would indicate an initial level of support at 0.057 BTC, which could potentially act as a base. Resistance levels are at 0.065 BTC and 0.070 BTC, which mark critical thresholds Ethereum needs to break if it is to regain momentum.
Conclusion
The recent surge in Bitcoin’s dominance has sent shockwaves through the market, with the Ethereum/BTC pair hitting its lowest level this year. While Ethereum’s fundamental analysis is strong, its technical analysis points to some momentum struggles at critical resistance levels. If Ethereum is to regain momentum, it needs to break above resistance levels and ride out ongoing network upgrades.
Key Points to Remember
- Bitcoin’s dominance has risen to 60.5%, a substantial uptick of over 3% in just a month.
- Ethereum’s dominance has dropped to 11.8%, down from 13.8% last month.
- The ETH/BTC pair hitting a year-to-date low underscores the fact that Ethereum has not performed as well as Bitcoin has this year.
- The Moving Average Convergence Divergence (MACD) indicator for Ethereum points to some momentum struggles at critical resistance levels.
- The Altcoin Season Index, which currently scores 28, shows that the market is not favoring altcoins.
- Ethereum needs to break above resistance levels and ride out ongoing network upgrades if it is to regain momentum.
Predictions
Based on the analysis, it is likely that Ethereum will continue to struggle against Bitcoin in the short term. However, if Ethereum can break above resistance levels and ride out ongoing network upgrades, it may be able to regain momentum and close the gap with Bitcoin.
Actionable Insights
- Investors should be cautious when investing in Ethereum, especially in the short term.
- Ethereum’s fundamentals are strong, but its technical analysis points to some momentum struggles at critical resistance levels.
- Investors should keep a close eye on Ethereum’s price chart and technical indicators, such as the MACD, to gauge its momentum.
- Ethereum needs to break above resistance levels and ride out ongoing network upgrades if it is to regain momentum.
Evidence
- CoinMarketCap data shows that Bitcoin’s share of the crypto market has risen to 60.5%, a substantial uptick of over 3% in just a month.
- Ethereum’s price chart for the year shows that momentum has fluctuated, but it still lags behind Bitcoin’s upward trend.
- The MACD indicator for Ethereum points to some momentum struggles at critical resistance levels.
- The Altcoin Season Index, which currently scores 28, shows that the market is not favoring altcoins.
Sources
- CoinMarketCap
- IndiaToday
- TradingView
- crypto.news
