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Ethereum News Update
During constructive phases in the cryptocurrency market cycle, investors flock to developmental platforms like Ethereum.
The result is a rise in ETH to Bitcoin prices.
However, during a market crash, the opposite occurs. ETH to Bitcoin rates fall. Why? The simple answer is that many investors consider Bitcoin the digital equivalent of gold, leading them to consolidate in BTC during times of panic.
In other words: bull markets favor Ethereum, bear markets favor Bitcoin.
We can track this relationship through the ETH/BTC ratio. It rose in sync with Ethereum to USD rates during the fourth quarter of 2017—which was a massive bull market—suggesting that as Ethereum gained in value, so did its status against Bitcoin.
One ETH token was even worth more than one-tenth of a bitcoin. This may sound unimpressive to novice traders, but more experienced traders understand it as an important landmark. It signals a shift in the balance of power.
However, most of Ethereum’s progress was undone by January’s ETH price crash.
The sudden shift to a bear market drove Ethereum prices lower. We’ve seen a moderate recovery since then, but investors remain cautious, which means that Bitcoin’s bounce was bigger than Ethereum’s.
This trend has culminated in a sharp divergence between the Ethereum to Bitcoin rate and the Ethereum to USD rate. The ETH/BTC rate is now down to 0.8350760.
That said, I don’t expect this caution to continue.
Cryptocurrency traders have short memories. Sooner or later, when the bull market is in full swing, investors might rotate their funds down the list of cryptocurrencies, starting with Ethereum.
Analyst Take
It doesn’t take a genius to recognize this opportunity. The ETH/BTC ratio is completely out of step with the Ethereum to USD rate. I expect a sharp inflection from this point, which would lead ETH prices to our Ethereum price forecast of $1,500 by the end of Q2.
Source: Price Confidential
