Ethereum plunges 13% vs. Bitcoin pushing BTC dominance to 2022 high — more pain ahead?
After a month of mostly sideways trading, July was an eventful month for cryptocurrencies with ethereum experiencing a major slump and bitcoin approaching its first post-2018 high. What does the future hold?
The “ethereum mining calculator” is a tool that provides an estimate of how much money you can make by mining Ethereum. The tool also shows the current price of Ethereum and Bitcoin.
As a crypto market sell-off began on May 12, Ethereum’s native token Ether (ETH) fell to its lowest level in over two months versus Bitcoin (BTC).
Finally, macro headwinds catch up with ETH/BTC.
In the last 24 hours, the ETH/BTC trading pair has dropped 7.5 percent to 0.0663. The drop was part of a correction that started on May 11 when the pair was trading at a local high of 0.0768. This drove Ether down by up as 13.75 percent versus BTC.
Daily price chart for ETH/BTC. TradingView (source)
Cryptocurrencies, like stock markets, have been under pressure in recent weeks. Money managers, traders, and investors, in particular, are showing symptoms of “de-risking” their portfolios as fears about a more hawkish Fed mount.
Ethereum, the second-largest cryptocurrency by market capitalization, has been affected by the same economic headwinds, and is presently trading at a 65 percent discount to its all-time high of $4,870 set in November 2021. In the same time frame, Bitcoin has fallen 63% from its all-time high of $69,000.
ETH/BTC has showed resiliency despite the market slump in 2022 because to Ether’s significantly reduced drop relative to Bitcoin’s. Nonetheless, the pair is now catching up to the negative trend, suggesting that more pain is on the way.
In play is a rising wedge breakdown.
The recent drop in ETH/BTC has seen the pair break below its dominant rising wedge pattern, indicating that the pair’s technical downside objective might be substantially lower than today’s local lows.
Rising wedges are bearish reversal patterns that push the price down by as much as their greatest height measured from the breakdown point.
After adding the structure’s maximum height (about minus 0.009 BTC) to the breakdown point, the ETH/BTC rising wedge’s breakdown objective comes to be approximately 0.064. (0.073 BTC).
Daily price chart of ETH/BTC with a ‘rising wedge’ breakdown scenario. TradingView (source)
In contrast, since June 2021, ETH/BTC has been challenging an upward sloping trendline (labeled “LTF support” in the chart above) as support. Traders congregated to buy the dip as the pair attempted to breach below the price floor on May 12. Ether rose 3.5 percent from its intraday low of 0.066 BTC as a result.
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However, as it pursues an upward continuing trend in the following days, ETH will encounter a series of resistance levels. The 0.236 Fib line of the Fibonacci retracement graph formed from the 0.087 BTC-swing high to the 0.064 BTC-swing low, followed by the 200-day exponential moving average (200-day EMA; the blue wave) around 0.073 BTC, establish an interim price ceiling of 0.069 BTC.
Bitcoin’s market share has reached a six-month high.
On May 12, the Bitcoin Dominance Index – a gauge that measures Bitcoin’s market dominance versus alternatives — climbed to over 45 percent, its highest level since November 2021. This might also indicate that, given the present market instability, traders see Bitcoin as the safer investment, or “digital gold.”
Chart of BTC.D’s daily performance. TradingView (source)
The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.
The “why did bitcoin spike” is a question that has been on the minds of many cryptocurrency investors. The answer to this question can be found in Ethereum’s plunge and Bitcoin’s push for dominance.