ETH/BTC Pair Hovers Near Cycle Lows Amid Macro Events and Technical Indicators
3min read The ETH/BTC pair has been hovering near its cycle lows, with key support around 0.05 BTC acting as a potential launchpad for a rebound. This support level is crucial as it has historically provided a floor for the pair, and a break below it could signal further downside pressure. However, if the support holds, it could pave the way for a reversal in the trend, with capital potentially rotating into ETH as BTC dominance declines.
The recent plunge in the U.S. Dollar Index (DXY) to new lows has fueled speculation about capital rotating into risk assets, particularly crypto. Historically, a weakening dollar has supported liquidity inflows into Bitcoin and Ethereum. However, the decoupling of BTC and DXY has reduced the dollar's reliability as a leading crypto market indicator. This decoupling suggests that other factors, such as macroeconomic catalysts, may be driving the market.
For instance, when U.S. President announced a tariff break, Bitcoin reclaimed $86k after trading below this level for seventeen days, while Ethereum surged past $2k. This move highlights the potential for macroeconomic events to drive crypto prices, even in the absence of a clear correlation with the dollar. The current non-linear price action of BTC presents ETH with a window to attract capital, as the ETH/BTC pair signals growing momentum with the MACD flipping bullish for the first time in nearly a month.
A well-defined support cluster has formed, marking the third compression phase in three months. This compression phase is an indication of a potential breakout and trend reversal in ETH’s favor. If the breakout structure is confirmed, analysts project a move toward 0.0019 BTC per ETH, with the pair currently hovering around 0.002 BTC. However, technicals alone won’t be enough to sustain a reversal. In prior demand zones, buyers failed to sustain accumulation, leading to liquidity depletion and a breakdown to a five-year low.
If history repeats, the likelihood of further liquidity sweeps remains elevated. In such a scenario, ETH/BTC could extend its downside, further weakening Ethereum’s relative strength against Bitcoin. For a confirmed ETH/BTC reversal, a BTC retracement remains a critical trigger. Current market structure identifies $89k as a major resistance zone for Bitcoin, where a prior breakout attempt failed, reinforcing overhead supply. If BTC faces sustained rejection at this level, a corrective move could unlock ETH/BTC rotation, offering a potential bid for Ethereum dominance.
However, bullish conviction appears weak. Since the post-election rally, ETH has shown an increased correlation to BTC’s downside, consistently forming lower highs. This structural shift suggests Ethereum is becoming increasingly reactive to Bitcoin’s drawdowns rather than benefiting from capital rotation. If BTC retraces sharply, ETH risks losing the $2K liquidity zone, potentially driving ETH/BTC to fresh cycle lows.
Ethereum (ETH) has been under significant pressure, with its value relative to Bitcoin (BTC) declining. Historically, BTC pullbacks have often led to periods of relative strength for ETH, raising the question of whether this trend will repeat. The current market dynamics suggest that ETH is exiting a phase of manipulation, characterized by confusing price movements designed to exhaust both buyers and sellers. This phase, according to analysts, is intended to create a more stable environment for future price movements.
Investors have shown increased buying pressure in March, with ETH trading above $1,900. This buying pressure could signal a potential recovery for the top altcoin. The short liquidation signals further indicate strong buying pressure, which could lead to a further uptrend. If the momentum holds, ETH may test higher resistance levels, potentially breaking out of its current range. The market has seen a resurgence of buying activity, with BTC rising and settling at $84,016. However, selling pressure intensified, leading to a temporary decline. Despite this volatility, the overall sentiment remains bullish, with factors such as increased transaction activity and address activity on the Bitcoin network contributing to a strengthening NVT Golden Cross indicator. This indicator suggests that Bitcoin may currently be undervalued, signaling a potential price increase.
The Inactive Supply Shift Index suggests there is no significant selling pressure from long-term Bitcoin holders, further supporting the bullish outlook. The market structure and growing interest from investors could trigger a price increase, potentially leading to new records in the coming months. The combination of increased address activity and transaction amounts suggests that the Bitcoin market is healthy and dynamic, with strong demand supporting potential price increases. In summary, while ETH/BTC is currently under pressure, historical trends and current market dynamics suggest that buyers may step up this time. The exit from the manipulation phase, increased buying pressure, and favorable indicators all point to a potential recovery for ETH and a bullish phase for BTC. Investors should closely monitor these developments as the market continues to evolve.
