While Ethereum remains below the critical $3,500 threshold, traders argue that overlooking the asset could be unwise, as the "next wave of momentum is imminent."
Ether (ETH)—the second-largest cryptocurrency by market cap—has declined 18% against Bitcoin (BTC) over the past six weeks. However, analysts caution against dismissing this "world computer" asset.
Crypto trader Merlijin The Trader warned their 378,200 followers in a January 16 X post: "Shorting Ethereum now is a mistake."
Ethereum’s Momentum Is "Undeniable"
"The trend is unmistakable—the next rally phase is approaching," Merlijin added.
At publication, TradingView data shows the ETH/BTC ratio (measuring Ethereum’s strength relative to Bitcoin) at 0.0332, down 17.5% since Bitcoin first hit $100,000 on December 5.
👉 Why ETH/BTC volatility signals opportunity for savvy traders
In the previous bull cycle (2021), the ETH/BTC ratio bottomed near 0.03 in March before surging to 0.077 by May—a period during which ETH’s price climbed 110% to $3,817.
Ethereum Could Benefit from Bitcoin’s Adoption
Some speculate that while attention focuses on potential Bitcoin policies under U.S. leadership, Ethereum may indirectly gain from broader BTC adoption.
Thomas Fahrer, co-founder of Apollo, suggested on January 16 that a strategic Bitcoin reserve initiative could propel BTC past $1 million this cycle, adding: *"This would also benefit Ethereum—a $4,000 target seems achievable."*
Ethereum briefly retested the $4,000 support level in December. To challenge its all-time high of $4,878 (November 2021), it must first consolidate above this key zone.
Currently, ETH trades at **$3,365**, having lost the $3,500 support level. Meanwhile, BTC fluctuates near $100,947 after multiple tests of the $100K milestone since December.
Key Takeaways:
- ETH/BTC ratio down 17.5% in six weeks.
- Traders anticipate a momentum shift akin to 2021’s 110% ETH rally.
- Broader Bitcoin adoption may indirectly boost Ethereum.
FAQ
Q: Why is the ETH/BTC ratio significant?
A: It measures Ethereum’s performance relative to Bitcoin, often indicating altcoin market trends.
Q: What’s Ethereum’s key resistance level?
A: $4,000—reclaiming this could pave the way for new highs.
Q: How does Bitcoin’s growth affect Ethereum?
A: Increased BTC adoption often lifts the broader crypto market, including ETH.