Ethereum’s native token, Ether (ETH), has been underperforming against Bitcoin (BTC) for five consecutive days as BTC’s price hit $30,000 for the first time since June 2022. On April 11, the ETH/BTC pair fell by almost 1.6% to 0.0634 BTC to test multi-month lows. The level is now down 6.75% from its local peak of 0.0679 BTC, which was set six days ago, and is only 2% above the local low of 0.0622 BTC from March 20. This indicates that Ether’s bullish reversal attempt against Bitcoin is about to fail.
According to CoinShares’ weekly report, institutional investors’ interest seems to be gravitating more towards Bitcoin than Ethereum. The report shows that Bitcoin-focused investment funds had inflows worth $56 million in the week ending April 7, while Ethereum-based funds only had $600,000 in inflows despite the hype surrounding the long-awaited Shanghai hard fork on April 12.
The ongoing decline in the ETH/BTC pair prompted it to retest its multi-month ascending trendline support (buy zone) near 0.0635 BTC for a possible price rebound towards its descending trendline resistance (sell zone) near 0.0750 BTC, a 16.5% price rally by June, as previously analyzed. The bullish reversal outlook takes cues from ETH/BTC’s price rebound in July 2022 after testing the same ascending trendline as support. The pair rose by about 60% to reach the descending trendline resistance near 0.0856 BTC.
If ETH/BTC falls decisively below the ascending trendline support, it could eye its 200-week exponential moving average (200-week EMA; the blue wave) near 0.0563 BTC, which is down approximately 10% from current price levels. Like the ascending trendline support, the 200-week EMA was instrumental in stopping Ether’s price decline versus Bitcoin in July 2022, making it the most probable downside target in the coming months.
However, it’s worth noting that every investment and trading move involves risk, and readers should conduct their research to make a decision. This article does not contain investment advice or recommendations.
The lack of institutional interest in Ethereum may change soon with several developments in the network, as the upgrade to Ethereum 2.0 gets underway. The Ethereum 2.0 upgrade aims to increase the network’s throughput and scalability while reducing the rate of inflation of the network’s native token, Ether.
Furthermore, Ethereum’s recent hard fork, dubbed the Shanghai hard fork, aims to make it easier for developers to build on the network and improve the user experience. This could boost institutional interest in Ethereum for the long term.
Ethereum’s strong fundamentals and increasing adoption make it a crucial player in the cryptocurrency market. The network is home to many decentralized applications (DApps) that run on its blockchain, including decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and gaming applications.
The growing popularity of DeFi applications has been a significant factor in Ethereum’s ecosystem’s success, surpassing that of Bitcoin’s in many ways. As the DeFi market continues to expand, Ethereum’s network usage and value are likely to increase as well.
In the second quarter of 2021, Ethereum’s value is expected to surge again, reaching $3,000, according to analysts. This prediction is supported by several factors, including the growing popularity of DeFi, the increased demand for NFTs, and the growing adoption of the Ethereum network by mainstream financial institutions.
In conclusion, Ethereum’s Ether token is currently underperforming against Bitcoin, but several factors may change this in the coming months. Ethereum’s strong fundamentals, growing popularity, and increasing adoption make it a crucial player in the cryptocurrency market. Therefore, investors should conduct their research and analyze the market before making any investment decisions.