For several months, Ether (ETH) has been trailing Bitcoin (BTC) in terms of performance, hitting a 3.5-year low against Bitcoin on September 18. The big question on traders’ minds is whether this recent low presents a buying opportunity or if Ethereum will continue to underperform in the near term.
Bitcoin vs. Ethereum: Diverging Prospects
While Bitcoin has been stuck in sideways price action, some analysts predict that it could break out of its range and reach a new all-time high before the end of 2024. Ether, however, has not inspired the same level of optimism. Polymarket, the largest prediction market, currently shows 85% odds that Ethereum will not hit a new all-time high this year.
That said, all is not lost for ETH investors. Bitwise Asset Management’s Chief Investment Officer has suggested that Ether might be a “contrarian bet” worth considering through the end of 2024. Despite its recent underperformance, Ether could be positioning itself for a potential comeback against Bitcoin.
ETH/BTC Weekly Chart: Symmetrical Triangle Pattern
Analyzing the ETH/BTC pair’s weekly chart reveals a symmetrical triangle pattern, which often signals indecision between buyers and sellers. Bulls have been defending the support line, while bears are putting up a strong defense at the resistance line. This back-and-forth has kept the pair inside the triangle for several months.
Both the 50-week and 200-week moving averages are sloping downward, while the Relative Strength Index (RSI) hovers near the oversold zone, indicating that bears currently have the upper hand. The ETH/BTC pair could drop further toward the triangle’s support line, where buyers may step in to stop the decline.
If the price bounces off this support and manages to break above the moving averages, the pair could remain inside the triangle for a bit longer. A break above or below the triangle would signal the next major move, with a breakout targeting 0.18 BTC, surpassing its previous all-time high of 0.15 BTC.
ETH/BTC Daily Chart: Is a Breakout Coming?
On the daily chart, the ETH/BTC pair has been locked inside a descending channel for months, consistently making lower highs and lower lows. This pattern has left bulls struggling to regain control.
However, there are some early signs of relief for bulls. The RSI has shown a positive divergence, indicating weakening selling pressure. Additionally, the 20-day exponential moving average (EMA) at 0.04 BTC has started to flatten, suggesting the bearish momentum might be slowing.
A break above the 50-day simple moving average (SMA), currently around 0.04 BTC, would signal a potential move toward the downtrend line of the channel. A successful break and close above the channel could indicate a trend reversal, leading to a broader rally for ETH/BTC.
That said, if the price breaks below 0.038 BTC, the pair could continue sliding, potentially testing the channel’s lower support line.
What’s Next for ETH/BTC?
While Ether has struggled against Bitcoin in recent months, technical indicators suggest that a reversal could be on the horizon. The symmetrical triangle pattern on the weekly chart, along with positive RSI divergence on the daily chart, signals that Ether may soon regain its footing.
However, the pair remains at a critical juncture. A breakout above key moving averages and the descending channel could mark the start of a new bullish trend. On the flip side, if the pair breaks below 0.038 BTC, it could indicate continued underperformance, potentially driving Ether lower in the short term.
