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The correlation between Bitcoin (BTC) and Ethereum (ETH) continues to whisk further apart with the latter failing to take dominance of BTC. At the beginning of the year, one BTC would have cost roughly 14 ETH.
However, altcoin’s unimpressive price action has ensured that 1 BTC equals 18 ETH. At press time, Bitcoin’s price was $67,628 while ETH was valued at $3,789. The different directions the cryptocurrencies headed were also reflected in the market liquidation.
According to Coinglass, $14.12 million worth of ETH contracts were wiped out in the last 24 hours. Most of these positions were longs. However, Bitcoin liquidations were lower at $3.20 million, of which most were short positions.
Coin Edition looked at the ETH/BTC chart which is an important metric in the crypto market. From our observation, the ratio became as high as 0.057 on May 21. This was partly due to the Ethereum spot ETF approvals.
However, data obtained from TradingView showed that the dominance has decreased. As of this writing, ETH was worth 0.055 BTC. Analysis of the chart showed that there was a resistance at 0.051 which ETH bulls have been able to breach.
However, if care is not taken, a decline in ETH’s price could pull the ratio down to the resistance. Failure to hold on to this point could lead it down to 0.048 where the crucial support stood.
A look at indicators like the Awesome Oscillator (AO) reinforced the assertion that ETH’s dominance could continue to drop. As of this writing, the AO was positive, indicating the momentum was bullish.
However, the red histogram bars on the indicator suggested that this bullish thesis might not last. Furthermore, the Relative Strength Index (RSI) reading dropped after hitting an overbought region.
From the look of things, BTC’s price could attempt to rise to $70,000. However, ETH might decline following in the upward direction, suggesting that its price could fall to $3,500.
On the flip side, things might change in ETH’s favor when the spot ETFs start trading live. If we go by the impact of the Bitcoin spot ETFs on BTC, then ETH might rally toward $4,500 in a matter of weeks.
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