Ethereum hits 3-week high vs. Bitcoin amid Fed-led market rout
Ethereum's native token Ether (ETH) tumbled to its worst levels in almost two months against the U.S. dollar on May 6 as the rout in financial markets rippled across the cryptocurrency sector. Nonetheless, ETH did fare better than Bitcoin (BTC) with the ETH/BTC pair hitting a three-week high.
Many analysts credited Ethereum's merge to proof-of-stake from proof-of-work as one of the key reasons behind the capital rotation from Ether to Bitcoin markets, including Toast.ETH, a pseudonymous analyst who underscored Ether's ongoing supply reduction as another reason why ETH may be currently outperforming BTC.
Interestingly, Ethereum has grown by nearly 250% against Bitcoin since the beginning of its migration to proof-of-stake in December 2020.
Eliezer Ndinga, a research lead at 21 Shares, a Zug-based crypto ETP provider, pointed out that "liquid staking" could also be playing a big role in reducing sell-side pressure.
Liquid staking is the main cushion here, hence why Lido is the largest DeFi app by TVL — up 51% YTD from $11.9B to over $18BAs of writing, Lido is the second largest app by TVL actually. Still an incredible ride. https://t.co/9HgBsu2PC6
Technicals indicate ETH/BTC could grow further in May but risks a broader correction overall as it trends inside a rising wedge pattern.
The pair has bounced after testing the wedge's lower trendline as support on April 30, and is now heading towards the upper trendline (around 0.078) as its interim upside target.
Related: Bitcoin’s rocky road to becoming a risk-off asset: Analysts investigate
But since rising wedges are typically bearish reversal patterns, ETH/BTC's likelihood of breaking lower remains higher in the long term.
As a rule of technical analysis, rising wedge breakdowns
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