- Ethereum has lost its two-year dominance battle with Bitcoin
- ETH fell through a huge upward trend line when faced with a crucial level
- What are the key areas to look for now?
Ethereum has lost a two-year dominance battle against Bitcoin…for now. After riding an uptrend since January 2020, Ethereum has this week fallen through the support line after it couldn’t break Bitcoin’s hold. The question is now, what’s next for Ethereum after this strong rejection?
Two Years of Compressions Resolves in Bitcoin’s Favor
As we covered last week, the ETH/BTC chart has been compressing for over two years, with ETH’s uptrend being firmly rejected at a resistance area of 0.075 BTC. With the situation set to come to a conclusion one way or another in the next couple of weeks, it was going to be telling which way the dice would fall:
The decision has this week seemingly been made, with Ethereum rejecting firmly and losing its line of support:
As we saw in late 2020, and again in mid-2022, this doesn’t necessarily mean the end is over for Ethereum, as the candle may reverse and it may pull back inside the wedge again. However, it is telling that such a convincing rejection happened at such a crucial point – even if it were to regain the structure, it only has another couple of weeks to find the strength to do what it has so far failed to do in over 18 months – break the resistance and turn it into support.
What Next for Ethereum?
Assuming this two-year battle has been lost, what next for Ethereum? Given that the recent rally has been led by Bitcoin and alts by and large haven’t caught up or exceeded it, we can be sure that this isn’t a full on bull run, where alts outpace Bitcoin once it has stopped running. Therefore, we need to find areas of support that Ethereum needs to retain to avoid slipping further behind.
For this we need to look at things from a birds-eye view:
This two-month chart shows clearly where Ethereum has to remain in order to have a hope of climbing in its ratio to Bitcon. If the current level is lost then 0.053 has to hold, or 0.036 is on the table. There be dragons.
Given that the market is in a really weird place right now it’s hard to get a beat on where Ethereum could go next, but supporters will be hoping that the continued rollout of Ethereum 2.0 might be enough of a catalyst to keep the price from collapsing completely.