Bitcoin price continues to emit bearish signals but Ether bullish trend can prevent BTC downtrend.
The price of Ether has gained 114% since March 13 and the altcoin could be on the verge of rallying higher. Increased activity on the Ethereum blockchain and the imminent launch of ETH 2.0 is likely to increase the price of Ether and these factors could also benefit Bitcoin’s price action.
Unlike Ether (ETH), Bitcoin (BTC) price sees a technically bearish structure in the form of a lower high. This means the BTC daily candle closed at a lower point than where it was earlier this month. Usually, low highs on high time frames such as daily charts can make the asset vulnerable to correction.
Ether Reached The Highest Level
Ether is currently showing a different price action than Bitcoin. The top altcoins have seen higher, as the latest daily candle closed significantly higher than in early February.
Cryptocurrency traders say that the strength demonstrated by Ether’s price action could support the momentum of the entire market and prevent Bitcoin from seeing another downtrend.
Traders Say Ether Withdraws Bitcoin This Time
Bitcoin price has increased by around four percent in the last 24 hours, although the high-low pattern failed to reduce the selling pressure on the dominant cryptocurrency.
According to cryptocurrency trader Chase NL, the general sentiment around the market is that Ether is positively influencing the short-term price movement of Bitcoin.
In the short term, two scenarios could play out as a result of the contrasting price trends of Ether and Bitcoin. Chase NL said that Bitcoin’s sluggishness could bring Ether down to test lower support or that Ether’s strong momentum could prevent BTC from seeing a sharp decline.
The trader noted:
“Can ETH rally hard enough to bring BTC back above the yearly open? Or will BTC’s sluggishness and inability to close above the yearly open bring ETH back downwards? This will set my ‘bias’ for the coming days/week most likely.”
Cryptocurrency analyst Scott Melker also stated that he is “more bullish on Ethereum than Bitcoin,” acknowledging Ether’s optimistic price structure.
ETH 2.0 Hype and Rising Network Usage Support Ether Progress
Ethereum’s strong position may be due to its strong extended rally from early February but when the crypto market crashed on March 12, Ether fell harder than most assets. While BTC saw a 50 percent drop, Ether fell nearly 70 percent to $90.
From record highs, Ether is down about 87 percent and BTC is down 63 percent in the same time period.
The imminent oversold setup of Ether and ETH 2.0 are the two fundamental factors that underpin the altcoin’s recent moves.
The soaring demand for stablecoins, many of which are based on Ethereum smart contracts, has also caused the total amount of value transferred on the network to reach par with Bitcoin, increasing Ethereum’s key fundamental metric.
Cryptocurrency researcher Ryan Watkins said:
“Stablecoins now account for 80% of daily transfer value on Ethereum, and they’re used for significantly larger transfers on average than Bitcoin. Stablecoins simply have better product market fit for transferring value between exchanges, one of today’s dominant use cases.”
Whether a marked increase in Ethereum network activity and anticipation for ETH 2.0 is enough to prevent a market-wide correction in the short term remains to be seen, as some traders warn that a break of BTC’s main trend line is likely to result in a correction.