Ethereum plunges 13% vs. Bitcoin pushing BTC dominance to 2022 high — more pain ahead?

2 years ago

Ethereum's autochthonal token Ether (ETH) plunged to its lowest level in astir 2 months against Bitcoin (BTC) arsenic a crypto marketplace sell-off intensified on May 12.

Macro headwinds drawback up to ETH/BTC finally

The ETH/BTC trading brace fell by 7.5% to 0.0663 successful the past 24 hours. The downside determination came arsenic a portion of a correction that began May 11 erstwhile the brace traded astatine the section precocious of 0.0768. That pushed Ether down against BTC by up to 13.75%.

Cryptocurrencies person travel under stress successful caller weeks alongside banal markets. Notably, wealth managers, traders, and investors amusement signs of "de-risking" their portfolios amid increasing concerns implicit an progressively hawkish Fed.

Ethereum, the second-largest crypto by marketplace cap, has besides been hit by the aforesaid macro headwinds, present trading 65% little than its grounds precocious of astir $4,870 successful November 2021. Similarly, Bitcoin is down 63% from its all-time precocious of $69,000 successful the aforesaid period.

As a effect of Ether's somewhat constricted diminution compared to Bitcoin's, ETH/BTC has shown resilience contempt the marketplace downturn successful 2022. Nonetheless, the brace present shows signs of catching up to the bearish trend,suggesting much symptom ahead.

Rising wedge breakdown successful play

ETH/BTC's latest diminution has had it interruption beneath its prevailing rising wedge pattern, suggesting the pair's method downside people could beryllium overmuch little than today's section lows.

That's due to the fact that rising wedges are bearish reversal patterns that typically nonstop the terms little by arsenic overmuch arsenic their maximum tallness erstwhile measured from the breakdown point.

Hence, the ETH/BTC rising wedge's breakdown people comes to beryllium adjacent 0.064 aft adding the structure's maximum tallness (around minus 0.009 BTC) to the breakdown constituent (0.073 BTC).

Conversely, ETH/BTC has been investigating an upward sloping trendline (marked arsenic "LTF support" successful the illustration above) arsenic enactment since June 2021. The pair's effort to interruption beneath the terms level this May 12 fell abbreviated arsenic traders gathered to bargain the dip. That prompted Ether to rebound by 3.5% from its intraday debased of 0.066 BTC.

But ETH faces a series of absorption levels arsenic it pursues an upward continuation inclination successful the coming days. They see an interim terms ceiling of 0.069 BTC — defined by the 0.236 Fib enactment of the Fibonacci retracement graph drawn from the 0.087 BTC-swing precocious to the 0.064 BTC-swing debased followed by the 200-day exponential moving mean (200-day EMA; the bluish wave) adjacent 0.073 BTC.

Bitcoin's marketplace dominance hits six-month high

The ETH/BTC's plunge coincided with the Bitcoin Dominance Index — a metric that measures Bitcoin's marketplace stock against altcoins — climbing to astir 45% connected May 12, its highest level since November 2021. This whitethorn besides suggest that traders are viewing Bitcoin arsenic the safer bet, i.e. "digital gold" amid the existent marketplace turmoil.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.

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