Most crypto investors and traders watch BTCUSD and ETHUSD charts. But only a few are looking at ETHBTC (Ethereum/Bitcoin).
But they should. Here’s why.
Have you ever wondered…
- Will Bitcoin go up or down?
- Will Ethereum go up or down?
- Should I buy Bitcoin?
- Should I buy Ethereum?
- Should I sell my Bitcoin?
- Should I sell my Ethereum?
If you’re not sure of the answer, you should take a look at ETHBTC for clues.
This is ETHBTC
ETHBTC shows you how much of Bitcoin you can buy with 1 Ethereum, basically showing how valuable Ethereum is compared to Bitcoin.
When the chart is going up, Ethereum is performing better than Bitcoin and when the chart is going down, Bitcoin is performing better.
The ups and downs range from -26% to +1846%.
Unique features compared to fiat pair
There are some unique features of this trading pair compared to ETHUSD or BTCUSD which make ETHBTC interesting chart to predicting future price and making investment decision.
If you look at the historical data, you can see that ETHBTC follows a similar pattern as ETHUSD.
You can also see that Ethereum tends to perform better in an uptrend and Bitcoin performs better when markets are coming down.
Here’s the summary of the unique features:
- Usually Bitcoin and Ethereum go up at the same time. And they fall at the same time.
- Ethereum tends to go higher up and makes a deeper low than Bitcoin.
- It is unlikely that ETHBTC goes to the moon so the price is slightly more predictable than ETHUSD or BTCUSD.
How can I use this information for my strategy?
This is not financial advice. But there are a few ways to use ETHBTC chart for deciding when you should buy or sell ETH or BTC.
It’s better to buy ETH at market bottom as it tends to go higher. And you can slowly transfer to BTC as ETHBTC goes higher to lower your downside risk.
Now you might be asking “But how can I predict market top and market bottom?”.
But you can use different tools like coinfairvalue.com to see if they think a cryptocurrency is undervalued or overvalued. If both ETH and BTC as undervalued and the chart is recovering from a recent dip, you can have some level of confidence that you are getting a good deal.
And you can use a free indicator like RSI (Relative Strength Index) to determine when a market is oversold or overbought.
A solid strategy
I don’t expect Ethereum to make crazy +1800% gains over BTC anymore as the market cap has increased and it takes more money to move either Ethereum or bitcoin prices up.
However if you buy Ethereum at undervalued prices and ETH starts to perform better than BTC, you can sell some of your ETH to BTC after +25% increase, then a little bit more at +50% and so on.
When all charts ETHBTC, ETHUSD, and BTCUSD are starting to show weakness, you can start to consider transferring BTC to USD to protect your capital from a big pullback.
Remember, It usually takes a long time to go up but a short time to come down. That’s why having strategy that incorporates protecting your wealth is critically important.
ETHBTC is easier on the emotions
Emotions are hard to turn off. Fear and greed are powerful emotions that affect how we make investment choices. The fear of missing out, the anxiety of waiting, and greed tend to get even the best of us.
When you measure your gains only in USD, it’s natural to be comparing gains to what you could buy in the real world. That can cause stress and unnecessary anxiety.
ETHBTC can help you make less emotional and better choices as you are comparing crypto to crypto as well as crypto to USD.
ETHBTC is a useful chart for all crypto traders and investors to look at for potential market tops and bottoms and buying opportunities.
You can confirm trends and support/resistance areas on ETHBTC as well as ETHUSD and BTCUSD.
You can create a less emotional investment and trading strategy with ETHBTC.
Now go to Tradingview and mess with ETHBTC.