Ethereum’s native token, Ether (ETH), plunged to its lowest level in almost two months once morest Bitcoin (BTC) as the cryptocurrency market crash intensified on May 12.
Macroeconomic setbacks finally reach the ETH/BTC pair
The ETH/BTC trading pair fell 7.5% to 0.0663 in the last 24 hours. The move lower came as part of a correction that began on May 11 when the pair quoted at the local maximum of 0.0768. That sent Ether down once morest BTC as much as 13.75%.
cryptocurrencies have suffered tensions in recent weeks along with the stock markets. In particular, fund managers, traders and investors are showing signs of de-risking their portfolios amid growing concerns regarding an increasingly hawkish Fed.
Ether, the second largest cryptocurrency by market capitalization, has also been seen affected for the same setbacks, and is now trading 65% below its all-time high of around $4,870 in November 2021. Similarly, Bitcoin is down 63% from its all-time high of $69,000 in the same period.
As a result of Ether’s slightly limited decline compared to Bitcoin, the ETH/BTC pair has shown resilience despite the current market decline. However, the pair is now showing signs of reaching the downtrend, which suggests more pain ahead.
Downside breakout of a rising wedge pattern in play
The recent decline in the ETH/BTC pair has caused it to break below its prevailing rising wedge patternsuggesting that the pair’s downside technical objective might be much lower than the local lows of May 12.
This is because rising wedges are bearish reversal patterns which normally send the price down by an amount as large as its maximum height when measured from the breakout point.
Therefore, the breakout target of the rising wedge of the ETH/BTC pair comes out to be near 0.064 following adding the maximum height of the structure, usually around minus 0.009 BTC, to the breakout point of 0.073 BTC.
On the other hand, the ETH/BTC pair has been testing an ascending trend line, marked as “shorter time frame support” in the chart above, as support since June 2021. The pair’s attempt to break below the bottom of the price on May 12 did not come to fruition, as traders rushed to buy the dip. That saw Ether rally 3.5% from its intraday low of 0.066 BTC.
However, ETH is facing a sequence of resistance levels as it chases a continuation uptrend in the coming days. They include an interim price cap of 0.069 BTC – defined by the 0.236 line of the Fibonacci retracement chart plotted from the 0.087 BTC high to the 0.064 BTC low followed by the 200-day exponential moving average (the blue wave) nearby. of 0.073 BTC.
Bitcoin Market Dominance Hits a Six-Month High
The crash of the ETH/BTC pair coincided with the Bitcoin Dominance Index – a metric that measures Bitcoin’s market share once morest altcoins – which rose to almost 45% on May 12, its highest level since November 2019. 2021. This may also suggest that traders are viewing Bitcoin as the safest bet – “digital gold” – amid the current market turmoil.
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