The potential rally in BTC/ETH suggests that bitcoin’s rally will quickly outperform ethereum in the next market rally.
Bitcoin is eyeing the possibility of outperforming ethereum in the near term when it comes to price potential.
That’s according to David Lifshitz, chief investment officer at Paris-based investment management services firm ExoAlpha. He notes that bitcoin has higher upside potential than ethereum in the near term. He said this after noticing a recent change in the BTC/ETH ratio.
Specifically, BTC/ETH compares the movements of bitcoin and ethereum. Lower readings indicate that bitcoin prices are rising more slowly than ethereum. Conversely, a higher BTC/ETH ratio indicates that Bitcoin’s price momentum is dominant over Ether.
Recently, Ether appears to be an upgraded version of Bitcoin. When bitcoin spiked against the dollar, ethereum rose against the dollar, but by a greater margin. Similarly, when BTC/USD fell, ETH/USD fell even more.
Bitcoin and ETH Price Comparison at Same Exchange Rate to USD
Differences in price momentum cause the BTC/ETH ratio to fall in a downward channel range. In this case, the ratio provides traders with a way to gauge which token (bitcoin or ethereum) will bring better profits in terms of short-term relative strength momentum.
Lifshitz analyzes: At current levels, the BTC/ETH ratio indicates that BTC is underpriced relative to ETH, so a savvy trader might buy Bitcoin and sell Ether at the same dollar ratio, betting that the ratio might be about to rebound from the downside channel to the upside channel, and then pull back when the ratio approaches the upper limit again.
BTC/ETH Flattens After 5.19 Crash
Comparing bitcoin and ethereum price action comes as Federal Reserve officials announced Wednesday that they expect to start raising interest rates in 2023, which is earlier than the previous forecast of 2024.
Bitcoin and Ether’s first reaction to the Fed news was negative. BTC/USD fell 4.51% on the day, while ETH/USD dropped 6.91%. By comparison, on May 19, BTC/USD fell 14.29% and ETH/USD fell 27.61% after Elon Musk launched a war against Bitcoin on Twitter.
The data shows that the huge price difference between bitcoin and ethereum began to level off after the May 19 crash, which Lifshitz called another sign that bitcoin will be more valuable than ethereum.
The relative price ratio of BTC/ETH seems to be flat over the last 3 weeks, and if we look closely at the last few days, the ratio is rising, which means BTC tends to be more valuable than ETH.
After testing the lower range of the channel, the BTC/ETH relative price ratio leveled off
At the same time, Lifshitz cautions that a moderate rally in BTC/USD will do little to offset the downward channel pressure. As a result, BTC/USD may continue to decline after testing the upper range of the channel.
Bitcoin and ethereum trading volume
The next trend for Bitcoin and Ether – either to the upside or downside – depends on their unique technical and fundamental factors.
Lifshitz said bitcoin remains in the $33,000 and $39,000 to $40,000 range, and would need to break above $42,000 to confirm a short-term bearish bias. That could see bitcoin rise to $50,000, coinciding with local lows on April 26 and May 12.
Bitcoin Trading Volume Soars After May 19 Crash, Despite No Clue on Bitcoin’s Next Price Move
For a bullish market to emerge, the executive added, bitcoin miners will need to sell off in a big way or be sure they will sell their bitcoin reserves at a higher price later. Meanwhile, low-buyers and institutional investors like MicroStrategy will provide further upside momentum to the $50,000 price target.
Lifshitz cautions, “Of course, in this battle of the longs and shorts, Elon Musk’s tweet factory steps in with one of his tweets supporting Bitcoin and another not, which affects the price of Bitcoin every time.”
As for ethereum, Lifshitz expects the cryptocurrency to soar to $2,850 in the next trading day. That’s the same level that ETH reached before its May 3 rally; meanwhile, $2,850 has become a resistance level for ETH’s attempt to fully rebound from its May 19 price bottom.
Ether trading volume remains largely unchanged after the May 19 crash
Ether bulls continue to grapple with the symmetrical triangle indicator and its tendency to push prices further down. Symmetrical triangles are continuation patterns. As such, they tend to move the price towards the previous trend.
Lifshitz said, “As the price approaches the apex of this triangle, expect clear direction above or below the $2,500 level.”
Meanwhile, one of the highlights of the Bitcoin and Ether charts is their trading volumes, which rose after the BTC/USD price plunged on May 19, while Ether’s volume remained roughly unchanged.
Lifshitz emphasized, “This mitigates a potential status reversal between bitcoin and ethereum.”
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/why-bitcoin-will-outperform-ether-in-the-short-term/
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