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The crypto market is flashing red on the daily timeframe with the global digital asset value standing at $1.14 trillion, down 1.50% on the day. The biggest cryptocurrency by market capitalization, Bitcoin (BTC), was trading at $27,172 with a bearish bias, down 2.22% on the day. Ethereum was also trading in the red at $1,870, after recording 1.7% losses in the last 24 hours.
Bitcoin’s dominance continued to drop on the third day running, standing at 46.29%, a decrease of 0.23% over the day. Meanwhile, the ETH/BTC chart shows that Ethereum continued to gain against the big crypto on the daily timeframe, raising questions about whether the proof-of-stake (PoS) crypto’s performance would surpass that of Bitcoin in the long term.
ETH/BTC Valuation Going Down – Benjamin Cowen
According to cryptocurrency strategist Benjamin Cowen, the valuation of Ethereum against Bitcoin is on a downtrend.
Cowen tells his 783,000 YouTube subscribers in a new ETH/BTC Outlook session the Bitcoin Dominance Chart (BTC.D) appears to be on a strong uptrend. Note that the BTC.D chart tracks how much of the global crypto market valuation belongs to Bitcoin.
BTC.D Daily Chart
The closely followed crypto analyst also notes that the Ethereum versus Bitcoin (ETH/BTC) chart appears to be taking the opposite route.
“To me, this just looks one higher low after another for Bitcoin dominance. And for Ether/Bitcoin, it just looks like one lower high after another, right? Just one lower high after another. Every time we get a lower high, everyone screams from the rooftops that this is it and the flippening is finally here. You fast forward a few more weeks and you just look back and guess what? It’s just another lower high.”
Cowen also considers the strength of the ETH/BTC valuation saying that it is not as strong as many would like it to be.
“I know this does not make a lot of people happy, right? I understand there are a lot of people who are bullish on the ETH/BTC valuation and would not like the idea that it is going down.”
According to the popular analyst, the ETH/BTC pair has been recording a series of lower highs on the weekly timeframe, with the odds pointing downward in the near- to medium-term. “Ethereum is a systematic bleed against Bitcoin”, he added.
A look at the ETH/BTC weekly chart below reinforces Cowen’s views that the pair has been recording a series of lower highs since early last year.
ETH/BTC Weekly Chart
There are times when the ETH/BTC valuation leaped 75% between June and September last year and it appeared the flippening would happen with Ether outperforming the flagship cryptocurrency. This was the period leading up to, during, and immediately after the Ethereum Merge, which marked the transition of Ethereum from a proof-of-work (PoW) consensus mechanism to PoS.
According to Cowen, “on the day of the Merge, the flippening narratives were everywhere. These narratives emerge all the time, but history shows that it doesn’t happen”.
But looking at the chart, one can see that the ETH/BTC variation has been increasing over the last five weeks or so. Despite the lower highs, the Relative Strength Index (RSI) has a hidden bullish divergence, recording higher lows in the recent past.
This means that the buyers have not given up on pushing the ETH/BTC pair higher. Unfortunately, there is stiff resistance from the 0.069 BTC area where the 50-weekly and 100-weekly SMAs appear to converge.
Overcoming this barrier would push the pair above the descending trendline to confirm an uptrend. However, pushing ETH above 0.1 would be an uphill task and that is what is required to set Ethereum on a path that would see it outperform Bitcoin.
At the time of writing, Ether is trading 0.068 against BTC and $1,870 against the dollar. Its market capitalization stands at $224.8 billion.
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