CRYPTO OUTLOOK: ETHEREUM PRICE ACTION KEEPS OUTPERFORMING BITCOIN
- Ethereum, Bitcoin, Ripple, and Dogecoin all declined during Wednesday’s trading session
- The ETH to BTC ratio highlights how Ethereum continues to outperform its crypto cousin
- US Dollar strength, higher Treasury yields remain headwinds for major cryptocurrencies
Cryptos came under pressure alongside stocks on Wednesday as an influx of volatility and risk aversion roiled markets. This looked largely driven by spiking bond yields and a stronger US Dollar. Ethereum (ETH/USD) is on pace to close the session -2.25% lower after hitting a fresh all-time high earlier in the day. Bitcoin (BTC/USD), Ripple (XRP/USD), and Dogecoin (DOGE/USD) turned lower as well with the major cryptocurrencies notching declines of -4.00%, -3.95%, and 5.38% respectively at the time of writing. While cryptos may have turned broadly lower on Wednesday, one trend remains prevalent: Ethereum outperforming Bitcoin.
ETH/BTC – ETHEREUM TO BITCOIN PRICE CHART: WEEKLY TIME FRAME (AUGUST 2015 TO MAY 2021)
Chart by @RichDvorakFX created using TradingView
This is reflected by the ETH/BTC ratio skyrocketing over the last few weeks, which is likely explained by traders rotating their positions out of Bitcoin and into Ethereum. That said, Ethereum remains quite a ways away from dethroning Bitcoin as the largest cryptocurrency by market cap. Ethereum’s market cap of $475-billion is less than half of Bitcoin’s market cap of $1.02-trillion according to the latest data. Nevertheless, with the ETH/BTC ratio currently at 0.08, there appears to be more runway for Ethereum to continue outperforming Bitcoin as their relative value converges toward the 2018 swing high of 0.11 before the 2017 peak of 0.15 comes into focus.
— Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
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