Ethereum is in the process of trying to reclaim its key $380 support level following a brief dip below it earlier today.
The cryptocurrency has been struggling to gain any momentum despite the intense strength seen by Bitcoin as of late, which is currently grinding up towards its key resistance at $13,800 as buyers maintain full control over its price action.
Although BTC and ETH have been highly correlated in the past, they are now trading fully independent from one another.
This correlation only returns when BTC is showing signs of weakness, which places immense pressure on Ethereum.
The weakness seen by ETH as of late is particularly transparent while looking towards the cryptocurrency’s Bitcoin trading pair.
One analyst is noting that ETH/BTC has now reached a bedrock support level that he has been watching for quite some time. A strong defense of this level could confirm it as a long-term bottom and help catalyze a strong rebound in the days ahead.
Conversely, a break below this level would be dire.
Ethereum Struggles to Match Bitcoin’s Momentum as Bulls Try to Reclaim $380
Earlier this week, Bitcoin faced a dire rejection at $480 that caused its price to see some immense short-term weakness that has since been erased.
Before this rejection, Ethereum was stable within the lower-$400 region. The subsequent BTC decline to lows of $12,800 caused ETH to reel all the way down to lows of $370.
It is now in the process of trying to reclaim its $380 support level but remains well below its multi-week highs of $420, while Bitcoin is just a stone’s throw away from setting fresh 2020 highs.
It is unclear when or if there will be a rotation of capital out of the benchmark cryptocurrency and back into altcoins.
Trader: ETH Reaches Critical Support Level
One trader explained in a recent tweet that Ethereum has now reached what he describes as a crucial support level on ETHBTC that he has been watching for quite some time.
He said that he is now lightening up on his bearishness and will reassess once the monthly candle closes tomorrow.
“I’ve been short biased (&short) ETH for quite a while now anticipating weakness into the monthly close. That has largely played out. Now that we’re hitting supports on the ETHBTC chart I’m going to lighten up and reassess once the monthly chart has actually closed.”
Image Courtesy of DonAlt. Source: ETHUSD on TradingView.
Unless Bitcoin dives lower in the near-term, there’s a possibility that Ethereum will start bottoming out and recoup some of its recent losses.
Featured image from Unsplash. Charts from TradingView.