Ethereum-Bitcoin Retests Critical 8-Year Downtrend, Traders Watch for Breakout

The Ethereum-Bitcoin (ETH/BTC) pair is once again trying to test a critical long-term trend line which has acted as a strong barrier to Ether’s relative strength versus Bitcoin for nearly a decade. As per a popular cryptocurrency analyst, a breakout above this trend line will be a sign of a leadership shift in the market in favor of ETH and other altcoins.

This has attracted a lot of attention from market participants who are watching crypto’s macro structure, with a breakout potentially reshaping capital flows into risk assets.

Long-Term Downtrend Carries Major Historical Weight

The ETH/BTC ratio has been in a declining trend since 2017-2018 when ETH touched a high of above 0.16 BTC to start a multi-year decline with a series of decreasing highs. The price action trend on a weekly chart in a post by Lark Davis demonstrates a long-term trend with a trend line crossing at around current levels of 0.034-0.036 BTC.

This line has consistently served as a resistance level, pushing the ratio lower with each successive test. A break above this line would be the first such breach in about eight years, having served as a ceiling that has defined relative weakness.

Also Read: Ethereum (ETH) Poised for $4K+ Rally as Whale Activity and RWA Adoption Surge

Current Price Levels Reflect Key Short-Term Structure

As of current trading, the value of ETH/BTC remains at or near 0.034 BTC, very close to its 52-week high of 0.043 BTC and significantly higher than its lows of 0.017 to 0.018 BTC seen during its extended periods of downtrends. These levels, recorded from current market data, help to understand the significance of a downtrend test and breakout at resistance.

But if the ratio can convincingly close above the downtrend line and hold above 0.04 BTC, technical analysts believe there is a potential for greater levels to be reached, such as long-term past resistance at 0.059-0.063 BTC, which represented greater Ethereum dominance over Bitcoin in the past.

Breakout Could Signal Changing Market Leadership

Ending a trend that has lasted for a decade on the ETH/BTC chart will be considered more than just a random event by many. This could be an indicator that money has rotated from other assets such as Ethereum and other altcoins to other markets like Ethereum.

It is pointed out that it has been observed that the overall crypto market tends to follow trends in the ETH/BTC market, while short-term gains in alts are often associated with times when ETH performs better than BTC.

Risks and Confirmation Signals

The market participants are eager to see not only an intraday rally but also a closing breach above the trendline and the major levels of resistance, as this would provide greater confirmation of the breach. A breach below these levels could see the ratio experience further pressure, moving back towards the lower levels of support.

Also Read: Ethereum (ETH) Pushes Toward $5,000 As Support Holds And Momentum Builds