This is a technical analysis post by CoinDesk analyst and chartered market technician Omkar Godbole.
It is unusual to see ether. The world’s second largest cryptocurrency by market capitalization, shows relative strength against market leader bitcoin on a day when the market is under pressure.
Today is exactly that rare case. While bitcoin has fallen more than 2% on the day to around $97,200, ether remains largely stable near $3,230, according to data source CoinDesk. This divergence has lifted the ether-bitcoin (ETH/BTC) ratio by over 2%, indicating ether’s outperformance.
With this in mind, here are three key charts worth paying attention to.
ETH/BTC ratio
The Binance-listed index is currently confined within a descending counter-trend channel, reflecting a pause following the strong rally seen between May and August. The slope of this channel is relatively gentle, suggesting that the price action is more of a consolidation phase than a full-blown downtrend.
Therefore, a breakout of this channel would confirm a renewed investor bias in favor of ether over bitcoin, suggesting further upside potential for the ETH/BTC ratio. Interestingly, the MACD histogram of the ratio appears poised to cross above zero, indicating a possible bullish shift in momentum.
Ether
Like the ether-bitcoin ratio, the price of dollar-denominated ether is also moving in a counter-trend descending channel, with signs of seller exhaustion near $3,000, as evident from the long tails attached to the recent daily candlesticks.
This suggests price rebound potential, although a clear breakout of the channel is needed to confirm a broader bullish outlook.
XRP/BTC
A possible rally in ether, widely considered the leading altcoin, could spark rallies in other major tokens, particularly the relationship between payments-focused XRP and bitcoin.
The ratio continues to rise in a four-year range, building momentum for a significant breakout. If ether rises, this could act as a catalyst for a bullish resolution in the XRP/BTC ratio, which could lead to notable gains.
