Key Points
Bitcoin (BTC) achieved a new all-time high of $97,862.64.
On the contrary, Ethereum (ETH) lags behind, recording its lowest performance against Bitcoin this year.
As Bitcoin consolidates near $97,379.69, questions arise about Ethereum’s potential to recover or if a broader pullback in altcoins will occur due to Bitcoin’s rally.
Bitcoin Dominance on the Rise
CoinMarketCap shows that Bitcoin’s share of the crypto market has risen to 60.5%.
This is a significant increase of over 3% in just a month.
The surge is primarily due to investments from institutional investors.
Edul Patel, CEO of Mudrex, stated in an interview with IndiaToday that more institutional investors are investing in Bitcoin than before.
He also mentioned the impact of the political landscape, specifically Donald Trump, the President-elect of the United States, who has revised his stance on cryptocurrencies.
Elon Musk has also been a positive influence on the crypto market.
In contrast, Ethereum’s market dominance has decreased to 11.8%, down from 13.8% last month.
The ETH/BTC pair hitting a year-to-date low indicates that Ethereum has not performed as well as Bitcoin this year.
Ethereum’s price chart for the year shows fluctuating momentum, but it still falls behind Bitcoin’s upward trend.
The Moving Average Convergence Divergence indicator for Ethereum suggests momentum struggles at crucial resistance levels.
The Altcoin Season Index, currently at 28, indicates a market disfavor towards altcoins.
The decrease in market cap of altcoins compared to Bitcoin suggests that liquidity is moving from altcoins, including Ethereum, towards Bitcoin.
Ethereum’s Potential Recovery
The path of Ethereum’s recovery depends on both fundamental and technical factors in the ETH/BTC pair.
Fundamental analysis shows the ongoing acceptance of Layer-2 solutions, development in decentralized finance, and active staking on Ethereum 2.0.
Technical analysis indicates an initial level of support at 0.057 BTC, which could potentially serve as a base.
Resistance levels are at 0.065 BTC and 0.070 BTC, marking critical thresholds Ethereum needs to break to regain momentum.
To close the gap, Ethereum will need to break above resistance levels and endure ongoing network upgrades.
Such moves might help the ETH/BTC pair regain their lost ground against Bitcoin.