Ethereum's native token Ether (ETH) tumbled to its worst levels in almost two months against the U.S. dollar on May 6 as the rout in financial markets rippled across the cryptocurrency sector. Nonetheless, ETH did fare better than Bitcoin (BTC) with the ETH/BTC pair hitting a three-week high.
Many analysts credited Ethereum's merge to proof-of-stake from proof-of-work as one of the key reasons behind the capital rotation from Ether to Bitcoin markets, including Toast.ETH, a pseudonymous analyst who underscored Ether's ongoing supply reduction as another reason why ETH may be currently outperforming BTC.
Interestingly, Ethereum has grown by nearly 250% against Bitcoin since the beginning of its migration to proof-of-stake in December 2020.
Eliezer Ndinga, a research lead at 21 Shares, a Zug-based crypto ETP provider, pointed out that "liquid staking" could also be playing a big role in reducing sell-side pressure.
Liquid staking is the main cushion here, hence why Lido is the largest DeFi app by TVL — up 51% YTD from $11.9B to over $18B
— Ξli (hiring!) (@elindinga) May 5, 2022
As of writing, Lido is the second largest app by TVL actually. Still an incredible ride. https://t.co/9HgBsu2PC6
Technicals indicate ETH/BTC could grow further in May but risks a broader correction overall as it trends inside a rising wedge pattern.
The pair has bounced after testing the wedge's lower trendline as support on April 30, and is now heading towards the upper trendline (around 0.078) as its interim upside target.
Related: Bitcoin’s rocky road to becoming a risk-off asset: Analysts investigate
But since rising wedges are typically bearish reversal patterns, ETH/BTC's likelihood of breaking lower remains higher in the long term.
As a rule of technical analysis, rising wedge breakdowns end up with the price crashing to a level at a length equal to the pattern's maximum height when measured from the breakdown point, i.e., 0.064–0.069.
Technical signals suggest more downside prospects for Ether in the coming months, with a "bear flag" pattern projecting ETH's price decline toward $1,700 in Q2, down about 40% from May 6's price.
Conversely, a rebound from the flag's lower trendline could have Ether retest $4,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Privy, a startup specialising in blockchain-based tools, has successfully secured $18 million in its Series A funding round. Paradigm, the crypto-focused investment firm, took the lead in this funding initiative, signaling a growing interest in web3 advancements.
JasperThe National Bank of Cambodia (NBC) has recently solidified its collaboration with Alipay, marking a pivotal step in enabling cross-border transactions for users of the NBC's digital currency, the bakong.
JasperThe potential for Binance CEO Changpeng Zhao to face a US jail term raises uncertainty, given his Dubai residence and the recent US-UAE law enforcement agreement.
Hui XinBrian Armstrong, CEO of Coinbase, applauds his company's adherence to U.S. money transmitter licensing laws amid Binance's recent legal troubles.
AaronBinance CEO Changpeng Zhao's resignation following legal challenges stirs varied reactions across the crypto community.
YouQuanThis innovative token standard aims to tackle fragmentation by deploying a bridged form of USDC on Ethereum Virtual Machine (EVM) blockchains.
JasperNike collaborates with digital art studio RTFKT to launch the Nike x RTFKT Dunk Genesis sneakers, priced at $222 each in Dunk Ghost and Dunk VOID editions. These futuristic sneakers come with integrated NFTs, accessible via an embedded NFC chip, allowing owners to bridge the gap between physical and digital assets by personalizing their sneakers through 3D files. The VOID and Ghost Editions are set to ship by July 31 and August 31, 2024, respectively, with an exclusive pre-order for NFT holders. Nike's history in NFT-integrated sneakers, along with RTFKT's clout in the digital art scene, underscores the significance of this collaboration in shaping the future of footwear and digital identity.
JixuIn the aftermath of Binance founder Changpeng Zhao (CZ) announcing his resignation and intent to plead guilty to violating anti-money-laundering laws, a new player emerged on the scene – the CZ token.
AaronBittrex Global, navigating regulatory uncertainty, plans a full operational wind-down, commencing with trading suspension on 4 December.
Hui XinThe focus of the discussion revolved around NYSE Arca, Inc.'s proposed rule change related to listing and trading Grayscale Bitcoin Trust shares under NYSE Arca Rule 8.201-E, as per the memo released by the SEC.
Davin