Bitcoin dominance hit a six-month high with Ether as ETH/BTC suffers heavy losses.
Ethereum’s native token, ether (ETH), fell to its lowest level in nearly two months against bitcoin (BTC) on May 12 on the deepening sell-off in the cryptocurrency market.
Macro headwinds are finally catching up with ETH/BTC
The ETH/BTC trading pair is down 7.5% to 0.0663 over the past 24 hours. The move lower was part of the correction that started on May 11th when the pair traded at a local maximum of 0.0768. This caused Ether to drop 13.75% against BTC.
Daily ETH/BTC price chart. Source: Trade View
Cryptocurrencies have been experiencing stress along with the stock markets over the past few weeks. Money managers, traders and investors in particular are showing signs of “de-risking” their portfolios amid growing concerns about increasingly hawkish US Federal Reserve policy.
Ether, the second largest cryptocurrency by market cap, also faced the same macroeconomic hurdles and is now trading 65% below its all-time high of around $4,870 set in November 2021. Similarly, Bitcoin is down 63% from its all-time high. of $69,000 for the same period.
As a result of Ether’s slightly limited decline against Bitcoin, ETH/BTC has shown resilience despite the market downturn in 2022. However, the pair is now showing signs of catching up on a bearish trend, suggesting more pain is ahead.
Breakdown of the rising wedge in-game
ETH/BTC’s recent drop has caused it to fall below its dominant rising wedge pattern, suggesting that the pair’s technical downside target could be much lower than the local lows of May 12.
This is because rising wedges are bearish reversal patterns that typically push the price to its maximum height as measured from the breakout point.
Therefore, the breakout target of the ETH/BTC rising wedge is around 0.064 after adding the maximum structure height, typically around -0.009 BTC, to the breakout point of 0.073 BTC.
ETH/BTC daily chart showing the breakout of the “rising wedge”. Source: Trade View
Conversely, since June 2021, ETH/BTC has been testing the rising trend line labeled “LTF Support” in the chart above as support. This prompted Ethereum to recover 3.5% from its intraday low of 0.066 BTC.
Also Read: DOGE Gets More Love On Twitter, Ether Gets More Hate: Data Analysis
But ETH is facing a number of resistance levels as it continues its uptrend in the coming days. They include a preliminary price cap of 0.069 BTC, defined by the Fibonacci 0.236 Fibonacci retracement line drawn from the 0.087 BTC swing high to the 0.064 BTC swing low, followed by the 200-day exponential moving average (200- day EMA). ; blue wave) by 0.073 BTC.
Bitcoin market dominance hits six-month high
ETH/BTC’s decline coincided with the Bitcoin Dominance Index — a metric that measures Bitcoin’s market share relative to altcoins — rising to nearly 45% on May 12, its highest level since November 2021. This could also indicate it suggest traders see bitcoin as more secure. bet – “digital gold” – amid the current market turmoil.
BTC.D daily performance chart. Source: Trade View
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