Ethereum's Ether Hits 15-Month Low against Bitcoin: A Closer Look into the 2023 Projections
Summary:
Ethereum's Ether (ETH) is currently trading at a 15-month low against Bitcoin (BTC). This comes following Ethereum's move to a proof-of-stake (PoS) platform and raises concerns for potential further decline throughout 2023. Institutional capital flow data supports this, showing Bitcoin-specific investment funds attracting significantly more investments than Ethereum. Experts suggest this discrepancy might be due to anticipation of a Bitcoin Spot ETF launch and the upcoming Bitcoin's fourth halving event. Please note this information is not investment advice and all trading comes with inherent risks.
Ether (ETH), the principal token of Ethereum, is experiencing its lowest trading levels against Bitcoin (BTC) in approximately 15 months, since Ethereum transformed to a proof-of-stake (PoS) platform. The scenario prompts speculation on whether this downward trend will persist into the later parts of 2023. By delving into the detailed graph data, it becomes clear how precarious Ethereum's position is.
Earlier this week, the ETH/BTC trading pair plummeted to a low of 0.056 BTC. This event signalled the pair's crossing below the critical threshold of the 200-week exponential moving average (EMA, shown as a blue wave) stationed around 0.058 BTC. This plunge below the 200-week EMA suggest the potential for escalated downward risks throughout 2023.
In the price history of ETH/BTC, the 200-week EMA has often acted as a sturdy support level. Back in July 2022, the pair surged by 75% within three months of interacting with the blue wave. On the contrary, it fell drastically by over 25% after losing this support in October 2020.
Having lost the 200-week EMA support yet again, ETH/BTC could face similar sales pressure in 2023. Simply put, the pair might land on the 0.5 Fibonacci line, roughly around 0.051 BTC - which would be nearly a 9.5% reduction from the current trading levels. However, if ETH sees a rebound to reclaim the 200-week EMA as a support level, the prices might rise near the 50-week EMA (Red wave) around 0.065 BTC.
When observing the continued fall of Ethereum against Bitcoin, it aligns with the patterns seen in institutional capital flow data. As proof, data from CoinShares, as of October 6, shows that funds specific to Bitcoin investment attracted a total of $246 million YTD. In contrast to this, Ethereum-based funds have suffered noticeable outflows, losing $104 million in capital during the same timeframe.
Hype around a potential approval of a Bitcoin spot ETF in the U.S could explain this disparity. Many trading experts believe that, if launched, such an ETF could attract investments to the tune of $600 billion. Furthermore, Bitcoin's upcoming fourth 'halving' event on April 24, 2024, which reduces the block reward for Bitcoin miners from 6.25 BTC to 3.125 BTC, is another factor boosting Bitcoin's value against other cryptocurrencies, including Ethereum.
Please note, this article does not offer any investment advice or recommendations. Investment and trading involve inherent risks, and individuals should conduct thorough research prior to making any financial decisions.
Published At
10/14/2023 2:55:19 PM
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