Market sentiment towards ETH remains high as institutional inflows shift from Bitcoin to Ethereum.
The decline also caused the ETH/BTC ratio to fall to a critical support level of 0.017, which triggered a more than 20-fold increase in the price of Ethereum during the 2021 bull market. The trend seems to be repeating itself, as the ratio has formed an upward trend since its decline to this range.
For this ratio to confirm the upward trend and the onset of a bull market similar to that of 2021 for the price of Ethereum, it must first overcome the resistance at the Fibonacci level of 61.8% of $0.0422. A bounce from this level could result in a two-fold increase to 0.082, the highest level since September 2022. However, the upward trend indicated by the ETH/BTC ratio is weakening, as shown by the descending ADX line.
The last time the ETH/BTC ratio bounced from this support, it catalyzed a more than 4000% surge in Ethereum. However, considering the growth of Ethereum's market capitalization, traders might expect a double surge in the price of ETH if history continues, surpassing $4000.
In light of the rising ETH/BTC ratio, the daily chart shows that the price of Ethereum is at a crucial point, defending a critical support zone. The range of $2,400 to $2,550 has acted as a solid support level for Ethereum, and a breakout always determines whether the price rises or collapses.
If ETH bounces from this support, the first resistance it must overcome is the 200-day Simple Moving Average (SMA) level of $2,669. Surpassing this level will confirm a long-term bullish outlook and support a strong upward trend. This could drive the price of ETH to the resistance zone between $3,800 and $3,900 and propel a bullish trend above $4,000.
