In the dynamically changing world of cryptocurrencies, the two main coins – Bitcoin and Ethereum – are in continuous rivalry. Recently, Bitcoin has shown impressive growth, while Ethereum, despite its achievements, seems to remain in the shadow of its bigger brother. But what does this mean for the future of both currencies? Do current market trends indicate further domination of Bitcoin, or does Ethereum have a chance to reverse the situation?
Bitcoin vs Ethereum: Current Trends
Analyzing the ETH/BTC ratio, we notice a long-term downtrend for Ethereum. This means that compared to Bitcoin, Ethereum is not maintaining an equal pace of growth. Since October, Bitcoin has increased by an impressive 57.5%, while Ethereum has achieved a growth of 48.34%. The difference is not large, but over the year, Ethereum seems to be slightly lagging.
In times when Bitcoin is rapidly growing, Ethereum does not achieve equivalent or higher growths. Moreover, in periods of decline, Ethereum prices suffer more than Bitcoin.
Will the trend reverse?
Technical analysis of the ETH/BTC chart does not inspire optimism. Since the beginning of June, there has been a decline, suggesting that Ethereum is not keeping up with Bitcoin in terms of performance. The key resistance zone at 0.055 is a challenge for Ethereum bulls, who need to break through it to change their fortunes. However, the market structure is currently bearish.
The Fibonacci level of 61.8% tested on November 10 quickly reversed the trend. A fall below the 0.051 level may signal that the ETH/BTC rate will be even lower, which may prompt investors to leave the Ethereum market in favor of Bitcoin if it breaks the key resistance at $45,000.
Analysis of Selling Pressure
A sign of impending selling pressure is an increased flow of assets to exchanges. So far, both for Bitcoin and Ethereum, such a phenomenon has not occurred. Since June, the reserve of Bitcoins on exchanges has been consistently declining, although a brief increase was noted between December 5 and 12, followed by a decline in Bitcoin prices from $43.7k to $41.2k.
Ethereum showed less volatility in its reserves, which have also been in a downtrend since February 2023. A small increase in Ethereum reserves between December 11 and 13 occurred during and after a price drop, suggesting panic among some holders.
Market Sentiments
Analysis of the social volume of both cryptocurrencies reveals that, as expected, Bitcoin’s volume is significantly higher than Ethereum’s. However, their trends are quite similar, which may result from the close correlation of their price outcomes.
The MVRV ratio for Bitcoin and Ethereum also shows similar trends, but their magnitudes are significantly different. Currently, BTC has reached 41.17%, and ETH 26.45%. Both indicators are at their six-month highs, despite the recent drop in prices. The conclusion is that both currencies are overvalued, with a greater profit for Bitcoin holders.
The question remains whether holders will decide to massively realize profits, which could cause a large wave of sales.
Summary
The cryptocurrency market is dynamic and unpredictable. Bitcoin, although currently dominating, is not free from the risk of sudden changes. Ethereum, struggling with its own challenges, still has the potential to reverse the trend. Investors must closely watch market indicators and sentiments to accurately respond to changes. In the world of cryptocurrencies, today’s trends can quickly become tomorrow’s history.
