The bitcoin-ether ratio has topped its 50-day moving average, confirming a bullish breakout.
As bitcoin (BTC) and ether (ETH) look south amid lingering FTX contagion fears, one chart analyst expects BTC, the leading cryptocurrency by market value, to stay relatively resilient.
“We expect bitcoin to outperform in the coming months,” Katie Stockton, founder and managing partner at Fairlead Strategies, said in a note to clients after considering the bitcoin-ether ratio’s recent move above the 50-day simple moving average (MA).
Stockton’s forecast is at odds with several fundamental analysts who expect ether to outperform bitcoin in the wake of ETH’s newfound deflationary cryptocurrency appeal.
The bitcoin-ether ratio crossed above the 50-day MA on Sunday and stood at 14.50 at press time.
The 50-day MA, one of the most commonly tracked technical lines, has historically been reliable as a breakout point. The ratio’s three of the previous four moves above the average brought sharp gains.
The latest breakout validates the bullish “higher low” of 12.70 created early this month. A higher low is formed when selling runs out of steam at a level higher than the preceding price low and is considered the first signal of an impending bearish-to-bullish trend change.
“The bitcoin versus Ether ratio has cleared the 50-day MA after making a higher low earlier this month,” Stockton said. “Next resistance for the ratio is at the 200-day MA, a breakout above which would target the June highs, with little resistance in between.”
At press time, the chart showed the 200-day SMA resistance at 14.82, ahead of the Oct. 13 high of 15.74.