Believe it or not, there was a time when a single Ethereum traded for over 0.10 BTC, meaning that you could sell a mere handful of the altcoin and obtain a whole Bitcoin as a result.
However, it’s a whole different story today; since the highs set at the peak of 2018’s bubble, altcoins have fallen off dramatically by dozens and dozens of percent, crushed under the pressure of a dominant Bitcoin that has benefited from a strong first-mover advantage and sell-offs in the altcoin market.
But, according to a fund manager and a flurry of fundamental signs, it may be time for Ethereum to start to reclaim some of its lost gains.
Ethereum may have finally printed a “major cycle low”: fund manager
Late last year, ETH traded as low as 0.016 BTC.
But, when Bitcoin maximalists were certain the altcoin was well on its way to zero, it reversed, with the trading pair attempting to double when it nearly reached 0.029 BTC just earlier this year.
According to Mohit Sorout — partner at crypto fund Bitazu Capital — it is “quite possible that ETH has printed a major cycle low [against Bitcoin],” pointing to the below chart, which he claims shows a bullish “weekly market structure.”
As to why exactly it signals upside is likely, he pointed to two factors:
- ETH/BTC has begun to print consecutive higher lows and higher highs, indicative of a reversal
- And the directional movement index (DMI) indicator has recently crossed bullish.
Weekly market structure is bullish👀 pic.twitter.com/0lYYK1V7zP
— Mohit Sorout 📈 (@singhsoro) April 25, 2020
It’s not only Sorout’s technical analysis that signals the Ethereum low is in, as there are also two fundamental factors corroborating the sentiment the bottom is in.
Last Saturday, the Ethereum 2.0 upgrade got its latest testnet named “Topaz.” According to Etherscan data, there are around 20,000 active validators on the network, suggesting that members of the Ethereum community are excited about this major technical upgrade.
As reported by CryptoSlate previously, the Ethereum 2.0 upgrade — which will make the network purportedly dozens of times faster and usable than the previous iteration — is expected by analysts to have a decisively positive effect on the price of the cryptocurrency.
Furthermore, we’ve seen ETH investors start to accumulate more of the cryptocurrency, with institutions also starting to siphon large sums of capital into the altcoin.
It may be a tad too early to tell
Despite these signs, there is one crypto wild card that could discredit the idea that Ethereum has found a low against Bitcoin: the block reward reduction, or the halving, taking place in just over two weeks from the time of this article’s publishing.
Crypto trader known as “Pentoshi” explained that with the halving near, he is reducing his exposure to altcoins due to the uncertainty around the event, which strongly decreases the chance Ethereum and other cryptocurrencies will outperform BTC. He wrote:
“The halving [is] near. If Bitcoin pumps, altcoins get rekt. if it dumps, altcoins get rekt.”
Cover Photo by Martin Sanchez on Unsplash