ETH/BTC technical analysis: Great two-way trading action
13:38, 3 February 2020
Ethereum and Bitcoin both posted impressive gains last month, with both cryptocurrencies officially moving back into bull markets.
ETH/BTC technical analysis shows that this month the pair is likely to once again present a series of two-way trading opportunities for crypto participants.
ETH/BTC medium-term price trend
ETH/BTC failed to move above its 200-day moving average last month, despite the ETH/USD pair staging a late-month rally, and Ethereum turning technically bullish for the first time in 2020.
Bitcoin stole the headlines with a 30 per cent gain in January. However, the ETH/BTC pair could start to creep higher this month if Ethereum outpaces its nearest rival in terms of gains.
I previously mentioned that Ethereum looked fairly undervalued when compared to Bitcoin. I expect that Ethereum will continue to close the distance in February.
Looking at the daily time frame, a breakout above the $0.1970 level should see the ETH/BTC testing towards the $0.2100 level this month.
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ETH/BTC short-term price trend
ETH/BTC technical analysis shows that the cryptocurrency has a bullish bias while trading above the $0.1850 support level.
The four-hour time frame shows that the cryptocurrency pair could test back towards key support around the $0.1900 level, and possibly the $0.1850 level, before pushing higher again.
ETH/BTC bulls need to invalidate a bearish head-and-shoulders pattern on the mentioned time frame, by moving price above the $0.2000 level.
The neckline of the pattern is currently located around the $0.1850 level, which is also the ETH/BTC pair’s 200-period moving average on the four-hour time frame.
Traders should note that if the pattern is invalidated, the ETH/BTC could rally towards the $0.2100 resistance level and possibly even higher.
Watch out for plenty of scalping opportunities in this pair in February, especially if Bitcoin starts to fade from $10,000, and ETH/USD continues to edge higher.
ETH/BTC technical summary
ETH/BTC technical analysis suggests that the pair could rally towards the $0.2100 level this month if bulls can gain traction above its key 200-day moving average.