Ethereum (ETH) has declined more than 10% against the US Dollar (USD) and almost 7% against Bitcoin (BTC) during the past 24 hours. The daily chart for ETH/BTC shows that the price has now run into a trend line resistance. However, there is still some resistance to further decline as the 21 Day EMA is yet to be breached. Ethereum (ETH) is currently in a position where it is prepared for both outcomes. If Bitcoin (BTC) rises, Ethereum (ETH) might eventually break the trend line resistance against Bitcoin (BTC) to begin a new cycle. However, if Bitcoin (BTC) falls, then we will see ETC/BTC follow to retest the previous low formed in December, 2018. Ethereum (ETH)’s recent rejection at the trend line resistance was a probable outcome considering the RSI had already entered overbought territory and also formed a double top.
The recent rally that began after the December, 2018 low was a strong one. It was the first time since April, 2018 that ETH/BTC had finally climbed above the 21 Day EMA. The pattern of decline that came into effect after the rally ended in May, 2018 can come into effect this time as well. The swings will not be as big and the moves not as aggressive but the pattern is likely to be the same which will ultimately result in ETH/BTC retesting its previous lows around mid-2019. This would also set the stage for the beginning of a long anticipated altcoin season around mid-2019 which should see coins like Ethereum (ETH) begin new cycles against Bitcoin (BTC). If that scenario follows, we would see the RSI forming a giant Inverse Head and Shoulders which means that the price will be ready for a major move towards its all-time high.
Chart for ETH/USD (1D)
Ethereum (ETH) is a promising project with a lot of potential. Its reputation has recently been marred by controversies, conspiracies and scams around ICOs but when it came into existence, it solved a big problem that Bitcoin (BTC) could not have solved. In addition to that, it paved the way for a whole new market of cryptocurrencies to come into existence. It is because of that development that we are talking about the possibility of an Apple token or a Tesla token today. Sooner or later, the cryptocurrency market is going to reach trillions of dollars in valuation and then we will certainly have these tokens replace traditional stocks. After the previous financial crisis, Bitcoin (BTC) came into existence to solve the money problem and it positioned itself to be the new money.
Ethereum (ETH) on the other hand never claimed to be money. It set out to solve the double spending problem in other ways that Bitcoin (BTC) could not. For instance, with Ethereum (ETH) smart contracts, you can be sure that if you hold let’s say a Lisk (LSK) token, you actually hold the token. There is not an iota of doubt that you hold the genuine token. However, if you go to your broker and buy Tesla stock, you cannot say for sure you are the only person to own that particular stock. This is not confined to stocks only; the same is true of Gold and other markets that have been corrupted to their very core. If it weren’t for Ethereum (ETH), we may have never solved this problem or created a whole new market that challenges the monopoly of big corporations that have enslaved us for decades with impunity.
Source: Crypto Daily