The recent downturn in the Ethereum to Bitcoin (ETH/BTC) ratio has caught the attention of investors, drawing comparisons to a similar pattern observed in 2019. Benjamin Cowen, CEO/Founder of ITC Crypto, emphasized the correlation between the timeline of Federal Reserve rate cuts and the commencement of quantitative easing (QE) in 2019.
Ethereum began the year at an ROI slightly above 1.0 compared to Bitcoin, suggesting it was performing slightly better than Bitcoin as the year started. By the end of 2019, the ROI had a downward trend, finishing significantly below the starting level, suggesting Ethereum underperformed compared to Bitcoin over the year.
At present, Ethereum’s price has exhibited a significant decline over the past day, plummeting by 4.08% to its current value of $2,907.79. This sharp drop from a peak of approximately $3,032 down to levels near $2,900 within a short span suggests a rapid sell-off.
The increase in trading volume by 5.02% over the past 24 hours indicates higher trading activity coinciding with the price drop, potentially driven by reactive selling triggered by market news or shifts in investor sentiment.
The volume-to-market cap ratio, standing at 3.28%, underscores relatively active trading concerning Ethereum’s total market capitalization. The initial resistance is observable at the recent high of around $3,032. Further resistance may be encountered near the $3,050 level if a recovery attempts to push prices to or beyond the recent high.
On the flip side, the first key support level currently being tested around $2,900 aligns with the recent low following the sharp price drop. A break below $2,900 could lead to the next level of significant support around $2,875, as indicated by minor consolidations in early trading hours.
The Ethereum 1-Day RSI reading of 38.32 suggests that the market may be approaching oversold conditions, potentially signaling buying opportunities if the RSI drops below 30.
However, the 1-Day MACD trading below the signal line at -78.2 indicates strong bearish momentum, prompting traders to wait for a bullish crossover before considering long positions. Similarly, the 1-Day KST trading below the signal line at -64.0784 signifies a bearish trend in the short term.
