ETH/BTC bounced from 7-year support trend line: Ethereum to $4,900?
After a significant week for Ethereum, a technical candlestick arrangement shows that ETH price could be poised for a sharp rise in the coming weeks and months.
One analyst points out the incident in the monthly chart. note The ETH/BTC ratio is reversing from its multi-year support trend line. In general, the analyst went on to say that when prices bounce from this line, altcoin prices tend to react and rise.
ETH/BTC rises from important support trend line
ETH/BTC is a ratio closely monitored by technical analysts. Compare the performance of the world’s 1st and 2nd most valuable coins.
Bitcoin has been solid for most of the past two years, but there is a clear descending channel on the monthly chart, indicating an upward trend.
There has been a series of higher lows so far. This means that the bulls have been under selling pressure for several years, keeping prices higher.
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Looking at the monthly chart, this month’s bar will clearly end on a strong note. This creates a double bar bullish reversal pattern that can trigger demand.
This will subsequently help push the ETH price higher. Nonetheless, the relatively lower trading volumes compared to those seen in July 2022 suggest that participation is not at historically high levels.
A bullish bar in June that confirms this month’s gains could set the stage for another rise. If this happens, results will reflect January 2021. A further 40% gain against Bitcoin could see ETH close above 0.08 BTC, pushing the coin closer to its 2017 highs.
Overall, Bitcoin was solid. Since September 2022, BTC has outperformed ETH, wiping out the gains of 2020 and 2021. It ended up being a downward channel, but even at this low-low level, engagement levels were relatively low.
Technically, volume analysis suggests this is bullish for ETH. Nonetheless, a close above 0.08 BTC would be strong evidence of an upward trend. This could potentially pave the way for ETH to strengthen, further narrowing BTC’s dominance.
Spot Ethereum ETF to Drive Demand: A Path to $4,900?
For years, since the launch and final approval of the spot Bitcoin exchange-traded fund (ETF) last January, this digital asset has been the only asset recognized by the U.S. Securities and Exchange Commission (SEC).
Due to these advantages and the approval of derivatives, BTC has become an institutional asset. Wall Street players like Fidelity and BlackRock have activated exposure to BTC through spot ETFs over the past four months, sending billions of dollars pouring into the asset.
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However, that changed last week when the US SEC approved the listing of all spot Ethereum ETFs. ETH staking has been removed in the revised 19b-4 file.
Nonetheless, the fact that Ethereum is almost becoming clear gives the network and platform tremendous strength. In response, the price of ETH surged by 30%, surpassing Bitcoin.
It is likely that ETH price will continue to rise in the coming weeks. It is yet to be seen what the reaction will be, especially among investors, but the coin’s price like BTC since mid-January 2024 will likely bounce back, possibly surpassing $4,100 and even breaking the 2021 all-time high.
Featured image from iStock, chart from TradingView
