- Ethereum is reaching a critical point in its price battle against Bitcoin
- The irresistible force of a three-year uptrend is approaching the immovable object of a two-year line of resistance
- What are the factors that will determine the outcome?
Ethereum is approaching a critical point in its price against Bitcoin as the irresistible force of a three-year uptrend approaches the immovable object of a two-year line of resistance. With only a matter of weeks to go until the pattern has to be resolved one way or the other, there are no hints yet as to the way it will break, so what will influence the way the battle plays out?
Toight Loike a Toiger
The Ethereum-Bitcoin chart is a very interesting one for many reasons, not least because of the length of time in which the move, whichever way it goes, has been setting up:
We can clearly see that Ethereum began a steady uptrend against the price of Bitcoin in January 2020, a rise that has been continued, barring a slip and recovery in the crash of last year. This reflects the increasing strength in the fundamentals of Ethereum as more investors, both private and institutional, see its potential within the crypto space.
However, each time it looks like ETH is going to break out against Bitcoin, it falls back underneath that area of resistance at 0.0755. The big question is then, what happens when it runs out of space in its wedge? Ethereum bulls will be looking for ETH to cross this area of resistance and, for the first time, use it as support. This would propel it to further highs:
Were this to happen, it could represent a generational shift in Ethereum support, and could see its prior highs of 0.1 and 0.14 BTC taken out and even exceeded. If Ethereum 2.0 is a total success and all the issues that have plagued Ethereum for the past few years are resolved, this could be the catalyst for such a move.
On the flip side, what Ethereum bulls don’t want to see, obviously, is that support line being lost. This would undermine the support that has been building for past three years and would set Ethereum back significantly in terms of dominance:
Fundamentals Will Tell
With only a month to go until this wedge is decided, which way can we see it breaking? On a technical level there is no sign of either the support line or the resistance line giving way. With Bitcoin in such a bullish mood of late, we could well see it take the lead over the next few weeks, but this will likely only be a temporary move before Ethereum catches up.
Much depends on the fundamentals – if either Bitcoin or Ethereum can produce something fundamentally positive that will benefit either coin long term, then that could be the clincher. At the moment that favors Ethereum, but who knows what Bitcoin has up its sleeves?
Either way, it will be a fascinating watch.