Ethereum (ETH) remains in an uptrend against Bitcoin (BTC) despite recent bearish developments. We have now see ETH/BTC decline to a key trend line support on the 4H time frame. This is now a point where we could expect further upside as the price is already trading above the key 38.2% fib extension level. Ethereum (ETH) like other altcoins recently broke past key resistance levels against Bitcoin (BTC) but just before it could go much higher the market started to take a turn for the downside. Considering that ETH/BTC is still trading above the 200 EMA on the 4H time frame, we remain optimistic about further upside from here.
The last time Ethereum (ETH) was in an uptrend against Bitcoin (BTC), we saw the altcoin market rally as a whole and Bitcoin (BTC) lagged behind. However, that uptrend was broken last month when ETH/BTC crashed below the 200 MA. Now that it has found support on the 200 MA, a rally like the one we saw in September could come into effect. This would give cryptocurrencies like Ethereum (ETH) the opportunity to complete their uptrend against Bitcoin (BTC) and reach the 200 day moving average which has still not been tested. We can expect a downtrend after that retest but for now the odds of a rally from current levels look appear much better.
The daily chart for ETH/USD shows that any rally in Ethereum (ETH) against Bitcoin (BTC) at this point should be considered as a short term bullish development in the midst of a bear market. It is important not to lose sight of the big picture regardless of how bullish the price might be from here on out. We can see ETH/USD rise towards the top of the descending channel once again or it might get stopped out before doing that but in any case any uptrend from here is likely to be short-lived.
The price has yet to decline towards the 61.8% fib extension level. It failed to do that the past two times it declined which means it would be nothing surprising if it does not test it once again. A move to the upside in Ethereum (ETH) is likely to push the price back above $160 for the foreseeable future. It is still likely to remain below $183. As long as the price trades within this descending channel, we will continue to remain long term bearish but short term; there might be some lucrative bullish opportunities to take advantage of. That being said, it is important to wait for confirmation of a bullish reversal before entering any trades.