The price of Ethereum's native token, Ether (ETH), is trading around a 15-month low versus Bitcoin (BTC), and the lowest since Ethereum switched to proof-of-stake (PoS).
Will it continue to weaken for the remainder of 2023? Let's take a closer look at the charts.
Ethereum price breaks below critical support vs. Bitcoin
The ETH/BTC pair dropped to as low as 0.056 BTC earlier this week. In doing so, the pair broke below its 200-week exponential moving average (200-week EMA; the blue wave) near 0.058 BTC, raising downside risks further into 2023.
The 200-week EMA has historically served as a reliable support level for ETH/BTC bulls. For instance, the pair rebounded 75% three months after testing the wave support in July 2022. Conversely, it dropped over 25% after losing the same support in October 2020.
ETH/BTC stares at similar selloff risks in 2023 after losing its 200-week EMA as support. In this case, the next downside target looks to be around its 0.5 Fib line near 0.051 BTC in 2023, down about 9.5% from current price levels.
Conversely, ETH price may rebound toward its 50-week EMA (the red wave) near 0.065 BTC if it reclaims the 200-week EMA as support.
Bitcoin bull case overshadows Ethereum
Ethereum's persistent weakness versus Bitcoin is reflected in institutional capital flow data.
For instance, as of Oct. 6, Bitcoin-specific investment funds had attracted $246 million year-to-date (YTD), according to CoinShares. On the other hand, Ethereum funds have lost capital, witnessing outflows worth $104 million in the same period.
The discrepancy is likely due to growing buzz about a potential spot Bitcoin exchange-traded product (ETF) approval in the U.S.
Trade pundits argue that a spot Bitcoin ETF launch will attract $600 billion. In addition, Bitcoin's fourth halving on April 24, 2024, is also acting as a tailwind versus the altcoin market.
Related: Bitcoin price gets new $25K target as SEC decision day boosts GBTC
The halving will reduce the Bitcoin miners' block reward from 6.25 BTC to 3.125 BTC, a bullish case based on historical precedent that cuts new supply in half.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
