Ethereum’s native token Ether (ETH) plunged alongside other cryptocurrencies on Dec. 4. Still, its move downside did not deter it from hitting a three-year high against Bitcoin (BTC), the world’s leading crypto by market capitalization.
The ETH/BTC exchange rate jumped a little over 11.50% to hit 0.0835 BTC for the first time since May 2018. The pair’s price rally appeared in contrast to Ether’s 15% price drop against the U.S. dollar on Saturday, which appeared in the wake of a market-wide selloff that saw Bitcoin plunging by as much as 21% intraday.
The ETH vs. BTC “hedge” narrative emerges
While Ether’s losses were substantial, they were relatively milder compared to Bitcoin in USD terms as the ETH/BTC pair surged to a three-year high. At the same time, some analysts believed that investors started treating the second-largest cryptocurrency as a haven against Bitcoin during the Saturday crash.
“It seems that investors are taking ETH as a hedge here,” said Crypto Birb, an independent market analyst in a tweet Saturday, pointing to a four-hour ETH/BTC price chart (as shown below) that showed the pair retracing sharply after testing its 200-period moving average (the orange wave) as support.
Lukas Enzersdorfer-Konrad, chief product officer at Bitpanda, noted that ETH/BTC’s November close was the best one in the last 45 months, meaning bulls still had “some power left for an additional run.”
“Ethereum is outperforming Bitcoin by a large margin this year […] It increased its market dominance to 22%. The number of active addresses on the network continues to climb while the net issuance of ETH continues to fall which might be the main reason for its rapid rise.”
As Cointelegraph covered earlier, Ether has shown the prospects of continuing its upward trend due to a technical support pattern, dubbed Ascending Triangle.
On Saturday, the ETH/BTC pair broke out of the Ascending Triangle range to the upside, accompanied by a slight increase in its trading volumes. In a “perfect” world, the pair’s move upside should stretch until it hits levels at length equal to the maximum distance between the Triangle’s upper and lower trendlines when measured from the breakout point.
In a “perfect” world, the pair’s move upside should stretch until it hits levels at length equal to the maximum distance between the Triangle’s upper and lower trendlines when measured from the breakout point.
As shown in the chart above, the Triangle’s upside target, from the breakout point near 0.077 BTC, puts the profit target near 0.1 BTC.