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Market Direction

Will Ethereum catch up with the market?

Updated: Jul 25, 2024
Published: Nov 2, 2023
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In a weird turn of events, BTC is scaring us away from ETH. Ethereum has a bullish structure overall, but it can’t just seem to get going. ETH has struggled with weak price action, especially compared to other altcoin plays. And now, the question is this. Will ETH ever regain its momentum, or is it destined to lag behind? Let’s find out.

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TLDR

  • Ethereum faces resistance at the $1,823 to $1,853 level, hindering its ascent.
  • ETH/BTC chart exhibits a bearish bias despite being oversold, suggesting a possible bounce.
  • Ethereum's underperformance relative to BTC raises market caution.
  • We advise caution now because there’s a decreasing conviction in ETH's ability to deliver a significant rally.
Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Technical analysis

The $1,823 to $1,853 area remains the key resistance for ETH. Despite being in a bull flag and breaking to the upside, ETH still can’t get above the $1,853 horizontal resistance. 

This hesitancy is definitely worth some cause for concern, just because BTC and many other altcoins have seen meaningful breakouts, yet ETH can’t seem to follow. 

It’s now more likely that BTC will need to rally further for ETH to get going. 

ETH 1D
ETH technical analysis

If we look at ETH/BTC, the chart technically looks quite ugly. It is currently sitting in a bear flag, which has a bias to break down. It is also slightly below major support, which isn’t positive for price. However, it’s heavily oversold, suggesting a bounce may be on the cards. If we get this, we’ll see ETH have its run.

ETH/BTC 3D Chart
ETH technical analysis

RSI and funding rates

The RSI on the daily is overbought. However, the positive news is that the oscillator has made a higher high, invalidating the earlier bearish divergence. So, this is somewhat more positive for price, or at least, less bearish. 

Funding rates are very positive, and open interest has increased substantially. It is not as high as previous months, but we’re beginning to see the mechanics move into an overheated territory. 

Cryptonary’s take

ETH continues to underperform BTC. Now, with BTC showing some more negative signs for price, we should be more cautious about the overall market. 

It’s possible that ETH can still do a delayed run. However, the longer it takes to play out, coupled with the decreasing odds of more upside in BTC, the less confident we are in ETH t running up to, say, north of $2,000. 

Action

  • We are not looking to add here, as our level of caution has increased simply due to ETH’s lack of performance so far. 
  • In the medium term, ETH can head higher above $2,000. However, our conviction is decreasing simply due to BTC looking more exhausted and ETH having underperformed while the market had moved higher.

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