ETH/BTC Pair Demonstrates Resilience Amid Expectation of Spot ETH ETF Approval
The cryptocurrency market encountered a sudden price correction on May 23, causing a crash in digital assets. Bitcoin (BTC) and Ethereum (ETH) were among the most affected tokens. However, the ETH/BTC pair showed significant resilience during this recent market downturn.
The ETH/BTC pair, which measures the performance of Ether in comparison to Bitcoin, is an important indicator for market participants. An increasing ETH/BTC ratio indicates that Ether is outperforming Bitcoin, reflecting investor confidence and shifting preferences in the cryptocurrency ecosystem.
The recent surge in this pair suggests growing optimism surrounding Ethereum, particularly in anticipation of the potential approval of a Spot ETH ETF. The rise in ETH/BTC shows that despite the broader market downturn, Ether is gaining favor among traders and investors. The anticipation of a spot Ether ETF approval is driving this shift and is considered a major catalyst for current market sentiment.
If an ETF is approved, it would provide institutional and retail investors with a regulated and accessible way to invest in Ether, likely leading to increased demand and higher prices, similar to how Bitcoin reacted to the approval of spot Bitcoin ETFs. The market’s forward-looking nature compels investors to position themselves ahead of this decision, pushing the ETH/BTC ratio higher.
Furthermore, Ethereum’s utility sets it apart from Bitcoin, which primarily serves as a store of value. This makes Ether an attractive investment for those seeking exposure to the broader applications of blockchain technology.
The recent price action represents a significant change. The chart reveals a descending trendline that has acted as a key resistance level since September 2022. This trendline demonstrates a series of lower highs, indicating sustained selling pressure on Ether relative to Bitcoin.
The ETH/BTC pair made a strong upward move in an attempt to break above this descending trendline. If successful and sustained, this breakout could signal a reversal of the long-term downtrend. However, the trendline resistance proved to be too strong, and the pair reversed its rally on May 24. Additionally, the relative strength index remains neutral, albeit close to the overbought threshold, with a score of around 69 on the daily charts.
Following the recent market correction, ETH price failed to hold above the $3,800 level, dropping more than 5% to a daily low near $3,630 on May 24.
If the downtrend continues, ETH price may test the support level near $3,580. A failure to hold the immediate support level could result in a further drop to the 20-day EMA (red wave) support near $3,340.
On the other hand, a recovery rally would encounter resistance near $3,990. Breaking above this level would allow the token to target the resistance near $4,300 before undergoing a correction.
The RSI for ETH remains neutral, with a score of 67.12 on the daily charts.
