Name Price24H (%)
Bitcoin (BTC)
Ethereum (ETH)
Cardano (ADA)
Relief Rally Ahead? Oversold Ether Eyes Gains Against Bitcoi...
Ethereum, News

Relief Rally Ahead? Oversold Ether Eyes Gains Against Bitcoin

Things may be looking up for Ethereum’s native token, ether (ETH).

Having suffered a 50 percent decline in March, the world’s second-largest cryptocurrency by market value fell to $394 by April 1 – the lowest level since Dec. 7, according to Bitfinex data.

However, at the time, ETH was extremely oversold, with the 14-day relative strength index (RSI) at record lows.

So, a corrective rally was overdue and, accordingly, ETH has created a minor double-bottom bullish reversal pattern as seen on the chart below.

Daily chart

What’s more, ether was trading above the neckline hurdle of $418 earlier today, signaling increased odds of a corrective rally to $475.

However, today’s drop in bitcoin prices from $7,100 to $6,700 seems to have played a spoilsport. ETH backed off from the daily high of $430 and is currently trading at $392.

So, ether has failed to hold on to gains above the double bottom neckline. Further, the daily candle now looks like a bearish “inverted hammer.”

These developments have neutralized the immediate bullish outlook.

Still, ETH is holding well above the recent low of $358 and could close (as per UTC) above $418 if BTC regains poise. In such a scenario, one can envisage a move higher to $475.

Also, the “death cross” indicator – 50-day moving average (MA) and 200-day MA crossover – could occur very soon. It should not be an undue cause of concern as the ominous-sounding signal is often followed by a rally (working often as a contrarian indicator).

There is always a risk of bitcoin extending losses further, though, and the ether-U.S. dollar exchange rate chart will likely follow suit. Hence, ETH bulls risk being trapped on the wrong side of the ETH/USD market.

Still, the ETH’s oversold status could work in its favor against bitcoin – i.e. ether will likely outperform bitcoin, irrespective of any bitcoin bull/bear move. And this is already happening, as BTC/USD has depreciated by 4 percent in the last 24 hours, while ETH/USD is trading largely unchanged on a 24-hour basis, according to CoinMarketCap. It also means that ETH has effectively appreciated by 4 percent against bitcoin.

ETH/BTC daily chart

The above chart (prices as per Bittrex) shows that the ETH/USD pair has cleared the descending trendline in a convincing manner, having formed a base around 0.053 BTC since the end of March.

The upside break adds credence to the “dragonfly” doji candle, which is characterized by a small body and a long lower shadow. It is considered a sign of bullish reversal if it appears at the bottom of the downtrend, as seen in the above chart.


  • The ETH/USD chart shows signs of life, but is vulnerable to a deeper correction in BTC/USD.
  • ETH/BTC looks set to test the 200-day moving average (MA) located at 0.0652 BTC in the short-run.
  • Only a close below BTC 0.053 (April 4 low) would signal a bullish-to-bearish trend change.

Race cars image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.



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