Looking back at past trends, Ethereum (ETH) may be gearing up to surpass Bitcoin (BTC) by the middle of Q3, given the prolonged period of the Stochastic RSI staying below the 20 mark for two years – an uncommon oversold condition.
This scenario bears a striking resemblance to the cycle between 2017 and 2019, during which the ETH/BTC pair reached a record low before embarking on a substantial recovery. Presently, ETH/BTC is mirroring that same trajectory, testing crucial support levels once again.
If history is any indicator, a shift in momentum could be on the horizon. Following the 2017-2019 cycle, ETH concluded 2020 with an impressive 487% year-to-date surge, surpassing BTC’s gain of 302%.
At present, supply constraints are surfacing, hinting at potential accumulation while ETH hovers in the $2.7K-$2.8K range. Additionally, the MACD is signaling early signs of a bullish crossover, suggesting a probable reversal in the trend.
With these technical signals aligning, is Ethereum gearing up for a significant breakout against Bitcoin?
Where is Investor Sentiment Shifting in the ETH/BTC Market?
During this month, Ethereum has witnessed a decline of over $80 billion in market capitalization, lagging behind Bitcoin amidst overall market uncertainties.
The ETH/BTC pair is still following a downward trajectory, with the RSI indicating a potential bottom. Despite this, a 20% dip in trading volume signals weak accumulation, making an immediate trend reversal seem improbable.
Nevertheless, early bullish indications are starting to emerge. To regain bullish momentum, ETH must first reclaim $3.5K as a solid support level before aiming for a breakout towards the post-election peak of $4K.
Considering historical patterns and technical analyses, the current consolidating phase of ETH could pave the way for a potential comeback.
Traders are advised to keep a close eye on volume inflows and bullish divergences in the ETH/BTC pair to confirm the echo of the 2017-2019 cycle.