On December 4, Ethereum’s native token Ether, (ETH), plunged along with other cryptocurrencies. Its move against Bitcoin (BTC) was not enough to stop it from reaching a three year high, the world’s largest crypto market capitalization.
The ETH/BTC exchange rates jumped a little more than 11.50% to reach 0.0835 BTC, for the first time since May 2018. This was in contrast to Ether’s 15% drop in price against the U.S. Dollar on Saturday. It happened in the aftermath of a market-wide selloff in which Bitcoin plunged by as much as 21% intraday.
Daily price chart for ETH/USD Source: TradingView
It is the “hedge” story of ETH vs. BTC that emerges.
Although Ether suffered significant losses, the USD equivalent of Bitcoin’s was much more manageable as the ETH/BTC exchange rate soared to a 3-year high. Analysts speculated that investors began to treat Ether as a safe haven during Saturday’s crash, and started using the second-largest cryptocurrency against Bitcoin.
Crypto Birb, an independent market analyst, tweeted Saturday that “it seems that investors are taking ETH to hedge here.” He pointed out a four-hour ETH/BTC chart (shown below), that showed sharp retracement after the pair tested its 200-period moving mean (the orange wave), as support.
ETH/BTC four hour price chart with 200-period MA Support Source: TradingView
Lukas Enzersdorfer Konrad, Bitpanda’s chief product officer, stated that ETH/BTC was closing November at the highest level in 45 months. This means bulls still have “some power left for an extra run.”
“Ethereum outperforms Bitcoin by a wide margin this year […] It increased it’s market dominance to 22 percent. It is possible that the rapid rise in active addresses on the network and the decline in net issuance of ETH could be the reason for the rapid increase.
Cointelegraph reported earlier that Ether is showing signs of continuing its upward trend thanks to Ascending Triangle, a technical support pattern.
Related: Ethereum is ‘about go parabolic against Bitcoin’ as analysts weigh BTC bear case
The ETH/BTC pair broke through the Ascending Triangle range on Saturday to the upside. This was accompanied by a slight rise in trading volumes. The pair’s upside move should be extended to the length of the Triangle’s lower and upper trendlines, measured starting at the breakout point.
If everything were perfect, the pair’s upside move should be extended to the length of the Triangle’s upper or lower trendlines measured from the breakout point.
ETH/BTC weekly chart with Ascending Channel pattern. Source: TradingView
The chart shows that the Triangle’s upside target is near 0.1 BTC. Its breakout point is near 0.077 BTC.
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