Ethereum price has turned oversold against Bitcoin, raising the possibility of a rebound in the coming weeks.
Ethereum’s native token, Ether (ETH), continues its multimonth downtrend against Bitcoin (BTC) in March, rising 5.5% versus the latter’s 19.5% gains on a month-to-date timeframe.
Bitcoin overshadows Ethereum amid banking crisis
As of March 23, the ETH/BTC pair was down about 9% month-to-date to 0.0633 while staying on course to record its worst month since September 2022, when it fell 11.75%.
From a fundamental perspective, traders preferred Bitcoin over Ether, hoping it would protect them from the ongoing banking turmoil in the U.S. and other parts of the world. The narrative gained momentum in recent weeks as Wall Street investors like Cathie Wood see Bitcoin as a potential “flight to safety” asset.
‼️CATHIE WOOD: #Bitcoin's response to the banking crisis is the most dramatic example that innovation solves problems. #Bitcoin was a flight to safety. pic.twitter.com/1lTD2Drto3
— Bitcoin Archive (@BTC_Archive) March 21, 2023
As a result of the growing speculation, Bitcoin outperformed traditional assets after March 8, when signs of trouble appeared at Silicon Valley Bank. In doing so, BTC also fared better than the altcoin market combined, including Ethereum.
ETH paints bullish fractal vs. BTC
However, from a technical perspective, Ethereum is positioned for a comeback versus Bitcoin.
At least two technical indicators pose the possibility that ETH/BTC will rebound sharply in the coming weeks.
Related: Ethereum price at $1.4K was a bargain, and a rally toward $2K looks like the next step
First, the pair’s three-day relative strength index has dropped below 30, which technical analysts consider an “oversold” area.
Second, Ether’s drop versus Bitcoin has landed its price near its ascending support level (buy zone in the chart below).
A similar scenario in the June–July 2022 session preceded an approximately 60% rally toward ETH/BTC’s descending trendline resistance (sell zone in the chart above). If the fractal plays out, the pair could rally toward the same resistance level by June 2023.
In other words, Ether has a decent chance of rebounding by more than 15% to around 0.075 BTC. Conversely, a break below the ascending trendline support will invalidate the bullish fractal.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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