Why ETH / BTC is returning to 3-year high

This week, ETH / BTC hit a new high of 2021, delivering returns of over 350% since the start of the year. According to technical analysis, the rally could continue.

On December 1, the ETH / BTC price hit 0.0835 BTC for the first time this year. The move took place during an uptrend that began in mid-October after hitting the bottom at 0.0630 BTC, which meant a 41% loss.

ETH / BTC daily price chart | Source: TradingView

Increasing acceptance is driving the ETH explosion

The ETH / BTC rally reflects the great interest in Ethereum, currently the world’s leading smart contract platform in terms of users and market capitalization. This is slightly different from Bitcoin, which is often a speculative hedge against inflation in global economies.

From now on, the ETH is a central asset in the growth-driving sectors of the crypto space such as NFT, DeFi and Metaverse. Companies that are active in this area need smart contracts from ETH in order to stimulate demand and support a steady upward trend.

Total value locked in DeFi platforms on Ethereum (including staking) | Source: DeFi Lama

Demand for ETH is expected to remain high over the next year, leading many analysts to predict a price of around $ 6,000-10,000.

Daily ETH / USD Price Chart | Source: TradingView

Matt Maley, senior market strategist at Miller Tabak + Co., sees an even stronger uptrend when it breaks above the mid-November high of around $ 4,900. Bitcoin bulls remain under pressure at highs of $ 69,000 to $ 65,000 in mid-November and mid-April, according to Maley.

When ETH hits and sustains a new ATH while BTC is trading in a downtrend, Maley claims:

“That would prove that ETH is the new cryptocurrency of choice for most investors.”

Technical factors also suggest stronger rallies for ETH / BTC in the future.

Breaking out longer price increase

The recent buy helped ETH / BTC break across a multi-month resistance trendline that forms an ascending triangle. Accordingly, the pair is forecast to extend upwards towards 0.1 BTC, as shown in the graph below.

Set up weekly ETH / BTC price chart and ascending triangle | Source: TradingView

Usually ascending triangles are continuation patterns, meaning that price is usually moving in the direction of the previous trend, which is the maximum height between the top and bottom trend lines measured from the breakout point.

The breakout point of ETH / BTC is 0.077 BTC while the maximum height of the triangle is 0.022 BTC. If things go “perfectly,” the ETH / BTC pair is likely to climb to 0.1 BTC, but given the volatility of the crypto sector, nothing can be said for sure.

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Minh Anh

According to AMBCrypto

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