This is a technical analysis post by Omkar Godbole, CoinDesk Analyst and Chartered Market Technician.
It’s rare to see ether Ethereum$3,207.31the world’s second-largest cryptocurrency by market capitalization, has shown relative strength against market leader Bitcoin on days when the market is under pressure.
Today is a rare example of that. While Bitcoin BTC$97,312.27 Ether fell more than 2% on the day to around $97,200, according to data source CoinDesk, but Ether remained mostly stable around $3,230. This divergence has increased the Ether to Bitcoin (ETH/BTC) ratio by more than 2%, indicating Ether’s outperformance.
With that in mind, here are three key charts worth noting.
ETH/BTC ratio
Consolidation of the reverse trend of the ETH/BTC ratio. (Trading View)
Binance’s listing ratio is currently confined within a counter-trend downward channel, reflecting the sharp upward lull observed from May to August. The slope of this channel is relatively gentle, suggesting that the price trend is not a full-fledged downtrend, but rather a consolidation phase.
Therefore, a breakout from this channel is a new confirmation of investor bias favoring Ether over Bitcoin, suggesting that the ETH/BTC ratio may rise further. Interestingly, the MACD histogram for this ratio looks poised to cross zero, indicating a possible shift in momentum to the bullish side.
ether
Daily chart of ETH in candlestick format. (Trading View)
Similar to the Ether-to-Bitcoin ratio, the dollar price of Ether is also moving in a countertrend downward channel, with signs of sellers drying up around $3,000, as evidenced by the long tails on recent daily candlesticks.
This suggests a potential price rebound, but a clean breakout from the channel is needed to confirm the broader bullish outlook.
XRP/BTC
A potential rise in Ether, which is widely regarded as the leading altcoin, could trigger an increase in the ratio of other major tokens, especially XRP and Bitcoin, which are focused on payments.
XRP/BTC multi-year consolidation. (Trading View)
This ratio continues to rise in its four-year range, and momentum is building for a significant breakout. If Ether spikes, this could act as a catalyst for a bullish resolution in the XRP/BTC ratio, triggering notable gains.
