The ETH/BTC trading pair represents the exchange between Ethereum and Bitcoin, the two largest cryptocurrencies. It is used to measure the relative strength of ETH against BTC, as well as to diversify cryptocurrency portfolios.
How does ETH/BTC work?
- Relative value: The price of the pair shows how much BTC can be obtained for 1 ETH. For example, if the ETH/BTC rate = 0.065, it means that 1 ETH costs 0.065 BTC.
- Market influence: The dynamics of the pair depend on the supply and demand for both cryptocurrencies. If Ethereum grows faster, the ETH/BTC rate increases, and if Bitcoin strengthens, the pair decreases.
- Trading volumes: ETH/BTC is usually less liquid than trading against USDT or other fiat pairs, but it provides opportunities for hedging and earning on fluctuations.
- The role of BTC as an "anchor": Many traders look at ETH/BTC to determine the strength of altcoins compared to Bitcoin, as BTC often sets the overall market trend.
How to use ETH/BTC in a strategy?
- Trend analysis: If the ETH/BTC pair is rising, it may signal a strong Ethereum market and investor interest in altcoins.
- Correlation with BTC: If Bitcoin shows weakness while ETH remains stable, it may indicate a shift of capital towards alternative assets.
- Technical analysis: Using support and resistance levels helps determine optimal entry and exit points.
This pair is interesting for traders who want to trade within the crypto market without involving fiat currencies.