Bitcoin
Altseason coming? Ethereum Recovers Key Trendline Against Bitcoin
Ethereum (ETH) showed significant strength against Bitcoin (BTC), recovering a key trendline and sparking discussions about a potential bull season.
O cryptocurrencyy has outperformed BTC since mid-May, driven by anticipation of spot Ether exchange traded funds (ETF) in the United States.
The price of Ethereum saw a significant increase after the announcement of the approval of Ethereum Spot ETF. The ETH/BTC ratio is currently at 0.056, indicating a significant increase for Ethereum.
ETH/BTC ratio. Source: TradingView
On the other hand, Bitcoin found support at $67,000 and faces possible declines to $65,000. Meanwhile, Ethereum holds steady at $3,700 amid increased volatility.
Since May 15, ETH has risen approximately 30%, compared to BTC’s modest 9% gain. This performance is reflected in the ETH/BTC ratio, which reached a two-week high of 0.05854 on May 23, marking a 31% increase.
A detailed analysis by pseudonymous crypto analyst Mustache has revealed that the ETH/BTC ratio is reversing from a multi-year support trendline. Historically, when prices bounce from this line, altcoin prices tend to trend higher.
ETH/BTC is in the process of reclaiming a trendline that has been immensely important for over 7 years.
I hope you haven’t been kicked out of business.
The downtrend is also about to end.
In the past, this has ALWAYS triggered an Altseason. pic.twitter.com/nS3wBgt2T8
— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 🧲 (@el_crypto_prof) May 27, 2024
Bullish sentiment amid ETF approval
The ETH/BTC ratio measures the performance of Ethereum relative to Bitcoin. Technical analysts look closely at this ratio as it compares the two most valuable cryptocurrencies.
Although Bitcoin has remained strong over the past two years, the monthly ETH/BTC ratio chart shows a descending channel, suggesting an upward trend for Ethereum.
This trend is attributed to higher lows over time, indicating that buyers have been absorbing selling pressure, keeping ETH prices higher.
Renowned crypto analyst Michaël van de Poppe noted that the weekly ETH/BTC chart showed a optimistic relative strength index divergence (RSI), suggesting that a trend reversal had begun. This index is considered bullish as long as it remains above 0.051.
Data from Santiment shows increased network activity on Ethereum. The number of unique smart contracts on Ethereum also increased from 37,870 on May 20 to 38,066 on May 31, according to CriptoQuant.
The approval of spot Ether ETFs by the United States Securities and Exchange Commission (SEC) on May 23 further fueled the bullish sentiment. This development is seen as a significant milestone for Ethereum, increasing its attractiveness to institutional investors and potentially driving further price appreciation.
Adding to the bullish outlook, on May 31, 920,000 Ether options worth $3.5 billion expired.
Historically, the expiration of crypto options contracts is linked to price volatility in the market. The put/call ratio (PCR), a technical indicator that reflects the trader’s market sentiment is crucial here.
A PCR below 0.7 is considered strong bullish sentiment, while a PCR above 1 is considered rude. This index compares the number of active put contracts (bearish) with call options (bullish), with a lower PCR typically indicating a bullish bias.
Ethereum Price Analysis
The price of Ethereum has experienced significant volatility over the past week, fluctuating between a high of $3,965 and a low of $3,757. Despite this, in the last three days, the price has struggled to stay above US$3,800, with bearish dynamics prevailing.
At press time, ETH is trading at $3,803.09, reflecting a 27% increase on a monthly basis.
Bullish momentum is expected due to expectations for spot Ethereum ETFs, with the SEC asking companies for their amended S-1 forms.
The overall outlook for Ethereum remains positive as investors wait for more regulatory market developments and reactions
Disclaimer: The content of this website should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.