Ethereum’s native token, Ether (ETH), sank along with other cryptocurrencies on December 4. Still, its downward move didn’t stop it from hitting a three-year high against Bitcoin (BTC), the world’s leading cryptocurrency by market capitalization.
The ETH / BTC exchange rate jumped just over 11.50% to hit 0.0835 BTC for the first time since May 2018. The pair’s price rally appeared in contrast to the 15% drop in the price of Ether. against the US dollar on Saturday, which came in the wake of a market-wide sell-off that saw Bitcoin sink as much as 21% intraday.
ETH vs BTC “hedging” narrative emerges
While Ether’s losses were substantial, they were relatively milder compared to Bitcoin in USD terms as the ETH / BTC pair rose to a three-year high. At the same time, some analysts believed that investors began treating the second-largest cryptocurrency as a safe haven against Bitcoin during Saturday’s crash.
“It looks like investors are taking ETH as a hedge here,” said Crypto Birb, an independent market analyst in a tweet on Saturday, pointing to a four-hour ETH / BTC price chart (as shown below) showing that the pair was back sharply after testing its 200-period moving average (the orange wave) as support.
Lukas Enzersdorfer-Konrad, Product Manager at Bitpanda, noted that ETH / BTC’s November close was the best in the last 45 months, meaning the bulls still had “some power left for an additional run.”
“Ethereum is outperforming Bitcoin by a huge margin this year […] Increased its dominance of the market to 22%. The number of active addresses on the network continues to rise while the net issuance of ETH continues to decline, which could be the main reason for its rapid rise. “
As Cointelegraph previously covered, Ether has shown the prospects of continuing its uptrend due to a pattern of technical support, dubbed the Ascending Triangle.
On Saturday, the ETH / BTC pair broke the Ascending Triangle range to the upside, accompanied by a slight increase in its trading volumes. In a “perfect” world, the upward movement of the pair should extend to levels of length equal to the maximum distance between the upper and lower trend lines of the triangle when measured from the breakout point.
In a “perfect” world, the upward movement of the pair should extend to levels of length equal to the maximum distance between the upper and lower trend lines of the triangle when measured from the breakout point.
As shown in the chart above, the Triangle’s upside target, from the breakout point near 0.077 BTC, places the profit target near 0.1 BTC.
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