Home » Bitcoin VS Ethereum, towards a handover?

Bitcoin VS Ethereum, towards a handover?

by v

The very latest economic aggregates have meant an increase in the likelihood of an economic recession in the West and consequently, an equivalent increase in the likelihood of a Federal Reserve (FED) pivot this summer. What might be the impact of this fundamental combination on the crypto market as Ether (ETH) looks to enter into outperformance against Bitcoin (BTC).

The probability of an economic recession in the United States is being revised upwards

The stock markets are currently facing a Cornelian dilemma, especially the so-called “risky” financial assets such as the stock market and the crypto market. So what’s it all about?

The latest updates in US economic conditions data, including the Institute of Supply Management (ISM) Purchasing Managers’ Indexes (PMI), have reinforced the likelihood of an economic recession 12 months out for the world’s largest economy.

The manufacturing sector, subject to new bank and bond financing conditions (the powerful upward cycle in interest rates that has been developing over the past 15 months), appears set for a contraction in activity and a reduction in prospective earnings.

Taken in isolation, this fundamental expectation is a bearish factor for risky assets in the stock market. But things are not so simple, because this increase in the probability of a decline in U.S. GDP (and in the West generally) increases another probability, that of the U.S. Federal Reserve reversing monetary policy and re-engaging in a downward cycle of interest rates to prevent the unemployment rate from soaring, a systematic phenomenon in a real economic recession.

Nevertheless, this potential downward monetary shift is a bullish recovery factor for the stock market and the bitcoin price. Ultimately, which of these two factors will take over the other? I can answer you in the following way: whoever knows the certain answer to the above question will be able to predict the medium term trend (these next few months) for the price of cryptos.

In the meantime, the price of Bitcoin (BTC) is still facing the major technical resistance of $2,9000, the last strong chartist argument for the permabear because if this resistance is breached, then BTC will go to $35,000 minimum.

On the other hand, it is entirely possible that the market will enter a retracement to make a pullback to the new strong support at $25,300, before resuming the upward path.

In terms of invalidating the rise, it is the break of $25,000 that would sound the death knell for the crypto market’s annual rebound. The technical choice will be made on the basis of fundamental data, such as the release of the US NFP report on Friday, April 7 at 2:30 p.m.

Chart that juxtaposes the weekly Japanese candlesticks (left) of the bitcoin price with the Japanese candlesticks in daily data (right)

Chart that juxtaposes the weekly Japanese candlesticks (left) of the bitcoin price with the Japanese candlesticks in daily data (right)

Ether could start outperforming Bitcoin as Shanghai update looms

Ethereum’s Shanghai update is due on April 12 and it looks like the Ether price is starting an outperformance phase on the Bitcoin price. Technical analysis applied to dominance curves shows that bitcoin’s dominance is currently moving under resistance while ETH’s dominance seems to be finally waking up to the upside.

This relative better behavior of ETH over BTC may last for the next few days.

Chart comparing Bitcoin's dominance with Ehereum's dominance

Chart comparing Bitcoin’s dominance with Ehereum’s dominance

Related Posts

Leave a Comment