Since its staking contract went live in December 2020, Ethereum’s market share has doubled, and its price compared to Bitcoin is approaching five-year highs.
Ethereum’s native token, ETH tickers down $1,595, might grow %35 this year compared to Bitcoin BTC tickers down $21,436 to approach 0.1 BTC for the first time since 2018.
Why Ethereum’s price must first break a key barrier?
When the price oscillates between a rising trendline support and a horizontal trendline resistance, a “ascending triangle” forms. It usually stops when the price reverses its trend.
ETH/BTC has been rising since May 2021, according to a weekly chart. The Ethereum token aspires to hit 0.0776 BTC, the pattern’s horizontal trendline resistance. The price could rise to the triangle’s top if this level is violated.
In other words, the ETH/BTC pair may rise 35% and reach 0.1 BTC in 2023, the next major resistance level.
ETH/BTC has attempted to break above the triangle’s resistance trendline eight times since May 2021. In November 2021 and September 2022, the pair rose %14 and %9, respectively.
Both rallies ended between 0.082 and 0.085 BTC, and the price sank immediately, pushing ETH/BTC back into the triangular area. Even if it breaks above the triangle, it may face resistance in the 0.082 to 0.085 BTC level, where it has stayed for years.
A move like this would make it more probable that ETH will fall into the triangle support, which is near its 50-week exponential moving average (50-week EMA), depicted as the red line in the chart above and is almost 6% lower than the current price, near 0.070 BTC.
Ethereum’s “deflation”
Ether is positive relative to Bitcoin due to its growing dominance over other crypto currencies.
ETH’s market cap rose from %10 in December 2020 to %20 in January 2023 when the Ethereum network switched from proof-of-work (PoW) to proof-of-stake (PoS) with a dedicated staking smart contract.
Since becoming a Proof-of-Stake blockchain, Ethereum’s economy has evolved in two major ways. Users must first temporarily lock up a portion of their Ether assets in an Ethereum PoS smart contract before collecting yield. Transaction fees on Ethereum are also decreasing.
Due to both developments, prices have dropped. The Ethereum network continuously creates less Ether tokens than are taken out of circulation, making ETH a “deflationary” asset.
Since December 2020, ETH/BTC has increased 250%. However, it is still 50% behind its 2017 high.
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