Will Ethereum Continue to Weaken Against Bitcoin in 2023?

Will Ethereum Continue to Weaken Against Bitcoin in 2023?

The price of Ethereum’s native token, Ether (ETH), is currently trading at a 15-month low compared to Bitcoin (BTC). This comes as a significant development, as it is the lowest point since Ethereum switched to proof-of-stake (PoS) consensus mechanism. The question now arises: will this downward trend for Ethereum continue throughout the remainder of 2023? A careful analysis of the charts will help provide insights into the future of this cryptocurrency pair.

The ETH/BTC pair recently dropped to as low as 0.056 BTC, breaking below its 200-week exponential moving average (200-week EMA). Historically, the 200-week EMA has acted as a reliable support level for ETH/BTC bulls. However, with the breach of this crucial level, downside risks for Ethereum have increased. In the past, when the pair tested the wave support in July 2022, it experienced a rebound of 75%. Conversely, losing the same support in October 2020 led to a 25% drop. This suggests that Ethereum may face similar selloff risks in 2023 after losing its 200-week EMA as support. The next downside target for ETH/BTC is projected to be around its 0.5 Fib line near 0.051 BTC, representing a potential 9.5% decrease from the current price levels. On the other hand, if Ethereum manages to reclaim the 200-week EMA as support, it may see a rebound towards its 50-week EMA near 0.065 BTC.

The persistent weakness of Ethereum against Bitcoin is evident in institutional capital flow data. According to CoinShares, Bitcoin-specific investment funds attracted $246 million year-to-date (YTD) as of October 6. In contrast, Ethereum funds have experienced capital outflows amounting to $104 million during the same period. This discrepancy can be attributed to the growing buzz surrounding a potential spot Bitcoin exchange-traded product (ETF) approval in the U.S. Experts believe that a spot Bitcoin ETF launch could attract a massive influx of $600 billion. Additionally, the upcoming fourth halving event for Bitcoin on April 24, 2024, is also acting as a tailwind for Bitcoin in comparison to the altcoin market.

Given the current downward trajectory and the breach of key support levels, the outlook for Ethereum against Bitcoin in 2023 appears bleak. However, as with any cryptocurrency, the market is highly volatile and subject to unpredictable changes. It is essential for investors and traders to closely monitor the price movements and market conditions to make informed decisions.

Ethereum’s native token, Ether, is currently trading at a 15-month low against Bitcoin. Breaking below key support levels and facing institutional capital outflows, Ethereum’s weakness is reflected in the charts and market data. While a rebound is not entirely out of the question, the bearish sentiment surrounding Ethereum suggests that it may continue to weaken against Bitcoin in 2023. As always, it is crucial for individuals involved in the cryptocurrency market to stay vigilant and adapt to the rapidly changing conditions.


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