Here’s why one analyst says Bitcoin will outperform Ethereum in the short term

In terms of price potential, Bitcoin (BTC) is staring at the possibility of outperforming Ether (ETH) in the short term.

David Lifshitz, chief investment officer at ExoAlpha, a Paris-based investment management service, believes Bitcoin’s near-term upside is higher than Ethereum’s. He said this after noticing the recent change in the BTC / ETH ratio.

BTC / ETH compares the trend dynamics of Bitcoin and Ether in detail. A lower value shows that the Bitcoin price is rising more slowly than Ethereum. Conversely, a higher BTC / ETH ratio shows that Bitcoin’s bullish momentum has an advantage over Ethereum.

Ultimately, Ethereum appears to be a premium version of Bitcoin. When the BTC / USD exchange rate increases, the ETH / USD exchange rate increases, but with a higher margin. Likewise, ETH / USD falls more sharply when BTC / USD falls.

The difference in price dynamics has caused the BTC / ETH ratio to fall into the descending channel. In this way, this ratio gives traders a chance to gauge which token – Bitcoin or Ether – will offer better returns in terms of short-term relative strength momentum. Lifschitz considered:

At current levels, this ratio suggests that BTC is undervalued compared to ETH, so an avid trader can buy Bitcoin and sell Ethereum at the same dollar rate, relying on the possibility of an increase on the tied upper channel and then returning to the closing ratio back to the upper limit.

Prices sideways after Musk-led crash

The comparison between Bitcoin and Ether prices comes when Federal Reserve officials announced on Wednesday that they are expected to start a rate hike from 2023, earlier than previously forecast.

Bitcoin and Ethereum’s initial reaction to the Fed news was negative. BTC / USD closes 4.51% lower today while ETH / USD is down 6.91%. For comparison, BTC / USD fell 14.29% and ETH / USD 27.61% on May 19 after Elon Musk launched a tweet war on Bitcoin.

The readings show a significant difference between the sideways movement of Bitcoin and ETH after the May 19 crash. Lifshitz calls this another sign that Bitcoin will become more valuable than Ether.

He says:

“Over the past 3 weeks, the relative price ratio of BTC / ETH seems to be flat and if we take a closer look at the past few days the ratio has gotten higher and higher, which means that BTC is tending to be more valuable. more valuable than ETH. “

Meanwhile, Lifshitz recalled that a slight spike in the BTC / USD ratio will help offset very little falling channel pressure. Therefore, the rate may decrease further after the top of the channel is tested.

Setting up Bitcoin, Ether transactions

The size of the next trend of Bitcoin and Ether – whether bullish or bearish – depends on their characteristic fundamental and technical factors.

Lifshitz said Bitcoin, still stuck in the $ 33,000 to $ 39,000 to $ 40,000 range, needs to break above $ 42,000 to confirm a short-term downtrend. That way, the benchmark cryptocurrency could soar to $ 50,000, a level that coincides with the local lows on April 26th and May 12th.

But for there to be an uptrend, the executive added that Bitcoin miners must either suppress a sale or believe that they will then sell their BTC reserves at a higher price. Meanwhile, dip buyers and institutional investors like MicroStrategy will offer additional uptrends on the $ 50,000 price target.

“And of course, in the middle of this bull-and-bear war, there is Elon Musk’s tweet factory, once pro-Bitcoin, once not, which makes the price shake every time,” recalled Lifshitz.

As for Ethereum, Lifshitz expects the cryptocurrency to soar to $ 2,850 in the upcoming sessions. This is also the level ETH reached before it did on the 3rd, meanwhile it also acted as a resistance as ETH managed to fully recover from the May 19th low.

Ethereum bulls continue to struggle with a symmetrical triangle indicator on the downside and its trend driving the price down. The symmetrical triangle is a continuation pattern. Hence, they tend to send the price in the direction of their previous trend.

“As price nears the apex of that triangle, some resolution is expected to rise or fall from the $ 2,500 mark,” Lifshitz said.

Meanwhile, a big lesson from the Bitcoin and Ethereum charts concerns their volume. While BTC / USD reported higher trading volumes after the price crash on May 19, Ethereum stayed more or less the same.

“This consoles a potential power reversal between Bitcoin and Ether,” emphasized Lifshitz.