Bitcoin (BTC-USD) has retreated from recent highs, triggering a broad decline across crypto markets. However, Ethereum (ETH-USD), which typically moves in conjunction with Bitcoin, has plummeted almost twice as fast as Bitcoin's price.
Yahoo Finance's Jared Blikre breaks down the details and explains the relationship between Bitcoin and Ethereum prices.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by angel smith
video transcript
Sheena Smith: –Bitcoin surpassed $66,000 in the morning, just shy of its all-time high. However, some investors may be a little concerned that the rally is stalling a bit at this level. Currently over 67,000. So what's next for cryptocurrencies? Yahoo Finance's Jared Blikre explains it all. Jared, please have some tea.
Jared Breichle: Yes, Sheena, the point I want to make here is that Bitcoin is barely green. It has increased by a whopping 4 basis points. However, Ethereum in the top right is down 2.34%. And I want to show you what happened last week. You can see that Bitcoin is down 3%. Ethereum fell 6%. This means that Ethereum has fallen twice as much as Bitcoin. And there are people who are tracking the Ethereum to Bitcoin ratio, and their charts are at levels that are actually raising a lot of eyebrows. Therefore, in technical analysis there can be what is called a golden cross or a death cross. A death cross is when the short-term moving average goes above 50 and below 200, all of which are long-term trend indicators.
All it shows is that the current situation is likely to continue in the future. So the concern is that if Bitcoin significantly outperforms Ethereum, then Ethereum is an altcoin replacement, and there's just not that much interest in cryptocurrencies as a whole anymore. And Bitcoin, the leader of the group, is expected to maintain its value even as other coins are sold off. So, let's sort them by performance. And it can be explained like this. At the bottom you can see that he has FTT tokens. This is a decrease of 13.5%. Dogecoin fell 13%. Perhaps these are at least the most speculative and some of the most speculative tokens on this list. And we see that their performance is significantly underperforming.
I noticed a similar situation happening this year, before the Bitcoin rally even started. So is this a sign of Bitcoin FOMO or fear avoidance? I'm leaning a little to the left there – or leaning towards the latter. I think it's a little disconcerting in the market right now, especially given some of the macro data that we're currently in or have received, especially the jobs report that was higher than expected this morning. So we'll have to see if this continues, but pay close attention to the Bitcoin to Ethereum ratio here.
Madison Mills: Okay, Jared. Thank you very much. I'm just complimenting your sneakers in the studio.
Jared Breichle: Oh, thank you.
Madison Mills: So I hope you get some out of it–
Sheena Smith: You're looking good this Friday.
Jared Breichle: Can I pan down?
Madison Mills: know. I have to pan down to get my Nikes. Thank you so much, Jared. I'm always so grateful.
