ETHBTC rate falls to 1.5 year low as Bitcoin holds $44K! What is happening to the price of Ethereum?
Bitcoin momentum around $44,000 has not had much of an impact on the Ethereum (ETH) price. While Bitcoin successfully broke the $42,000 resistance level and targets $45,000, Ethereum struggled to break above that resistance level of $2,300. As a result, Ethereum’s performance compared to Bitcoin is declining and the ETHBTC rate has reached new lows.
Bitcoin’s Rise to Dominance Could Turn Bearish
Recently, Bitcoin’s market dominance has increased significantly and currently accounts for 55%. On the other hand, Ethereum (ETH) was unable to maintain momentum in line with Bitcoin, causing the ETHBTC rate to plummet. The ratio has fallen to levels last seen in June 2022 and is currently trading at 0.05152. This decline is due to Ethereum’s inability to keep up with Bitcoin’s price movements.
Analysis by QCP Capital shows BTC approaching $45,000 in anticipation of the official announcement of the spot ETF in the second week of January, raising questions about how much of this news is already priced in.
They note that the likelihood of hitting the all-time high of $69,000 again will depend on the actual flows the ETF brings in the first few weeks of trading. Absent significant inflows, QCP Capital suggests this scenario could lead to a classic “sell the news” event in 2024.
Interestingly, a downturn in Bitcoin could lead to capital inflows into altcoins, creating a bullish scenario for the price of ETH. Recent market indicators indicate that the focus of sophisticated traders is shifting from Bitcoin to Ethereum. While Bitcoin surged 60% this quarter, Ethereum rose a more modest 35%.
However, Ethereum’s potential is highlighted by a 30% increase in futures open interest on CME, outpacing Bitcoin’s 20% growth. With the ETHBTC rate recovering from recent lows, buyers could soon aim to hold levels above $2,300.
What’s next for ETH price?
Ethereum prices recently surged past the $2,300 level, but increased selling prevented buyers from maintaining momentum near this level. As a result, ETH price fell below the 23.6% Fib channel and hovered just above the EMA20 trendline. At the time of writing, the price of ETH is trading at $2,277, up more than 1.6% from yesterday.
Buyers have been strongly defending a decline below the EMA20 level and are targeting a possible completion of a bullish ascending triangle pattern if it holds above this level. Surging moving averages and high RSI suggest strong bullish momentum. The expected target after a surge above $2,300 is $2,464, but resistance is expected to be near $2,500.
Conversely, a drop below the $2,200 level would indicate increased dominance of Bitcoin and would give bears the upper hand to initiate short positions in ETH. A further decline would consolidate the price around $2,000.