4 reasons why Ethereum is finally topping out versus Bitcoin
The native digital currency of Ethereum, known as Ether (ETH), has experienced a significant increase of over 20% against Bitcoin (BTC) since February 12th. This surge is largely attributed to the anticipation of a potential approval for a spot Ethereum Exchange-Traded Fund (ETF) in the United States by May of this year. Despite this positive development, the widely-monitored ETH/BTC pair has reached a crucial point that could potentially lead to a correction in the near future. In this article, we will delve into the potential bearish scenarios for this pair in detail. Some of the major topics that will be covered include the impact of the Kraken crypto exchange, the purpose of web 3.0 tools, the involvement of the U.S. government in the crypto industry, the current state of major cryptocurrencies, the risks associated with web 3.0, the role of cryptocurrencies in the web 3.0 chart, the emergence of Red Fox crypto, the latest developments in the crypto market on a weekly basis, and the outlook for crypto in January 2022.

Ethereum’s downward trend continues

Interestingly, on the four-hour ETH/BTC chart from Kraken crypto exchange, Ether is hovering around its 1.00 Fibonacci retracement level at 0.06044 BTC. Additionally, its relative strength index (RSI) has reached “overbought” territory after crossing above 70, signaling a potential correction.

This combination of technical indicators is reminiscent of a fractal pattern seen in January 2024, which preceded an 11.65% drop in ETH/BTC rates. This suggests that we may see a similar downturn in Ethereum’s value relative to Bitcoin in the near future.

The overbought RSI, combined with a historical resistance level, could lead to investor fatigue and a decline towards the 0.786 Fib line at 0.058 BTC. This is a major risk in the web 3.0 landscape, where cryptocurrencies like Ethereum are gaining popularity as a tool for decentralized applications.

The emergence of a rising wedge pattern

However, the appearance of a rising wedge pattern, awaiting a bearish confirmation, could potentially drive down the ETH/BTC exchange rate by 10.85% to 0.053 BTC by March.

Rising wedge formations are typically seen as bearish reversal signals, indicating a shift from upward to downward momentum.

This development comes amidst ongoing discussions about “web 3.0” and its purpose in the crypto space, as well as the involvement of the U.S. government in the major crypto market. However, these advancements also come with potential risks, as seen in the recent volatility of the cryptocurrency market. As we approach January 2022, it will be interesting to see how these factors continue to impact the crypto market, including the performance of “red fox crypto” and other major players in the industry.

In the meantime, traders and investors may want to keep a close eye on the web 3.0 chart and stay updated on the latest developments in the crypto world through regular readings of “crypto weekly” publications.

The weekly chart for ETH/BTC displays a descending triangle pattern

On the weekly timeframe, Ether is exhibiting indications of a bearish reversal as it struggles to surpass its long-term descending trendline resistance. Interestingly, this trendline aligns with the 50-week exponential moving average (50-week EMA) for ETH/BTC on the Kraken crypto exchange.

This confluence of resistance levels may impede Ether’s upward movements in the upcoming weeks, potentially leading to a pullback towards 0.051 BTC. This level has previously acted as a strong support, with notable rebounds occurring in June 2022 and October 2023-January 2024 periods.

Kraken Crypto Exchange Reports Decrease in Ethereum Whale Holdings

A notable contrast has emerged in the cryptocurrency portfolios of influential investors, known as “whales,” in both Ethereum and Bitcoin.

Recent data from Glassnode reveals a significant decline in the number of entities holding 1,000-100,000 ETH in February.

On the other hand, there has been a rise in the number of Bitcoin entities with over 1,000 BTC, likely due to the influx of capital into newly introduced ETFs.

This trend indicates a growing preference for Bitcoin over Ethereum among institutional investors, adding to the bearish outlook for ETH/BTC based on both technical and fundamental factors.

Categorized in:

Tagged in: