Crypto Daily – Despite the launch of the Spot ETFs, the $ETH price has continued to seriously underperform , as well as many of the large cap altcoins. Is this about to change?
Ethereum still the dominant layer 1 for smart contracts
Ethereum (ETH) was a poster child of the last bull market. It’s the number 2 cryptocurrency by market cap, and the heir apparent to become the foremost layer 1 blockchain for the majority of future dApps.
However, changing from proof-of-work to proof-of-stake consensus, the inability to accomplish the necessary scaling and speed, and the rise of its major competitor in , have meant that the Ethereum journey has been fraught with difficulties.
All this said, Ethereum is still very much the dominant layer 1 for smart contracts, it still has a preponderance of developers, and the $ETH price surely cannot continue to wane against the other major cryptocurrencies.
$ETH bounces from critical support
Friday is looking positive so far for the $ETH price. Up nearly 2% on the day so far, $ETH has recovered more than 23% since that ‘grey’ Monday on the 5 August, when the Japanese stock market crashed.
That dip for $ETH went as far down as its bull market support trend line, all the way down at $2,120, which also happens to be very strong horizontal support. Currently bouncing off of the 0.618 fibonacci level, $ETH looks to be going higher against the dollar.
Long, downward trend for $ETH against $BTC
However, the chart that arguably really matters, is the pairing. Looking at the daily chart, it can be seen that $ETH has been in a long downward trend against $BTC since the beginning of September 2022. In fact, during the Japan crash, the $ETH price even fell out of the downward channel, but $ETH bulls bought the price back inside once more.
ETH/BTC pair arrives at pivotal level
Zooming out into the weekly time frame, it becomes apparent that in spite of the long sideways and downwards movement against $BTC, the price of $ETH is still in an uptrend. Critical support has now been reached, and now it depends on the market as to whether the $ETH price bounces from here, or whether the support breaks.
Given that $ETH has now seen a 54% retrace against $BTC since the local high of mid-December 2021, it might be expected to start reversing this trend. In addition, the stochastic RSI is bottoming, and a cross back up can add impetus to the $ETH cause.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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