Ether’s (ETH) price is enjoying some green in its Bitcoin (BTC) pair as of April 21, 2021, recording its highest levels since early February. Traders are now starting to expect a major rally in the near term given the technical breakout of ETH/BTC.
Ethereum is breaking out against Bitcoin and the traders are turning bullish on the trading pair and altcoins in general. In the first two weeks of April, ETH was significantly outperformed by Binance Coin (BNB), the native token of Binance Smart Chain (BSC).
Notably, the high transaction fees on ETH coupled with the high user activity on Binance Smart Chain led BNB to gain a lot of momentum against Ether.
Nevertheless, in the last few days, ETH price has begun to rally against both Bitcoin and BNB, the first and the third biggest cryptos in the global market, respectively.
Why Is Ether Rallying Against Bitcoin?
In the last 24 hours, with Ether in the front, the altcoin market gained against Bitcoin, causing the Bitcoin Dominance Index to drop to 50.7% on CoinMarketCap, the lowest level since the summer of 2018.
One key reason why the altcoin market keeps rallying is that the altcoins generally saw steeper drops than bitcoin after the Coinbase listing. Thus, when BTC started to consolidate and stabilize, altcoins began to see a relief rally, led by ETH and BNB’s momentum.
After the futures market recovered, after more than $10 billion worth of liquidations on just one day, the appetite for risk-on assets within the crypto space also possibly rose. That price action pushed the demand for Ethereum, Dogecoin (DOGE), BNB, and many other cryptos with considerably high volumes and valuation.
In the short term, traders say that the breakout of the ETH/BTC pair may lead to a wider parabolic rally, mainly for altcoins. A pseudonymous trader by the name ‘Crypto Capo’ expressed some optimism towards ETH’s breakout against bitcoin. He said:
“$ETH/BTC is going to redefine the concept of parabolic.”
Furthermore, a crypto derivatives trader NekoZ said Ether is showing some strong momentum that might spill over to the altcoins. The trader noted:
“Love the reaction we are having so far. Should carry nicely into the week and build momentum around alts.”
Another renowned crypto derivatives trader called “Bluntz” said that ETH/BTC looks “insane” after a major capitulation event. By description, a capitulation event is a scenario when an asset’s price bottoms out after a steep drop. Bluntz insisted that ETH is demonstrating a double bottom chart, which in technical analysis often points toward a near-term trend reversal.
“ETH double bottom on 4h, and ETH/BTC looks absolutely insane again. Wow that was the greatest capitulation event I can remember for a long time. Even i capitulated most of my lev trades.”
On-Chain Data Is Bullish
Based on the data published by CryptoQuant, the amount of ETH being staked in the Ethereum 2.0 deposit contract is surging.
That decreases the circulating supply of ETH on exchanges, which should put some upside pressure on the price of ETH. The increase in fees that is verifiable via on-chain data also shows that activity continues to surge on Ethereum despite the already high fees. One Ethereum investor, Aftab Hossain, said:
“Ethereum / DeFi has focused heavily on infrastructure, which BSC was able to copy and centralize to make it faster with an incentive to focus on integrated UX i think cheaper L2 tx’s will enable for greater scaling and will allow for critical smart contract wallet innovation.”
Binance Smart Chain and other layer ones have been performing quite strongly against Ethereum. Nonetheless, the release of Eth2 and layer two solutions may make Ethereum quite compelling for the casual users in the months ahead.