ETH Bullish Structure Is What Could Prevent A BTC Downtrend

The latest cryptocurrency news show that the price of Ethereum (ETH) has rallied by more than 114% since March 13 and this altcoin could be on the verge of rallying higher in the future. Increased activity on the Ethereum blockchain and the approaching ETH 2.0 launch are one of the things that are bolstering the ETH bullish structure and one of the factors that can influence Bitcoin’s price action.

Unlike Ether, the Bitcoin news now show that the price of the dominant coin is seeing a bearish structure in the form of a lower high. We previously wrote about the importance of the $7,200 level for BTC and how important it is for the coin to breach it now.

Typically, lower highs at a high time frame like the daily chart can leave an asset vulnerable to a correction. The good thing now is that the ETH bullish structure can help Bitcoin and influence its price action. Even analysts are confirming this on social media.

Crucial moment here for $BTC and $ETH.

Can ETH rally hard enough to bring BTC back above the yearly open? Or will BTC's sluggishness and inability to close above the yearly open bring ETH back downwards?

This will set my "bias" for the coming days/week most likely.

— Chase_NL (@Chase_NL) April 22, 2020

Wondering how?

Well, the top altcoin has seen a higher high and the most recent daily candle closed significantly higher than in early February. We can see that crypto traders said that the strength displayed by the ETH price action could also support the momentum of the entire market and prevent BTC from seeing another downtrend.

According to traders, there are two ways in which the ETH bullish structure is helping Bitcoin, including:

1. The hype around ETH 2.0 and the rising network usage – This could support Ether in the future and is what gave the coin strong positioning. We saw how correlated ETH and BTC were during the flash crash – which means that we can see that again in a bullish run.
2. The surging demand for stablecoins – Many of these stablecoins are based on top of the ETH smart contracts, leading to the total amount of value on this network to reach parity with Bitcoin.

Additionally, one cryptocurrency researcher named Ryan Watkins recently tweeted about stablecoins and said:

Value transfer on Ethereum just reached parity with Bitcoin.

This is a story of the explosion of stablecoins in Q1 2020.

1/ pic.twitter.com/noKBvFbgFO

— Ryan Watkins (@RyanWatkins_) April 15, 2020

The anticipation for ETH 2.0, noticeable improvement in the network activity on Ethereum and the stablecoin usage are all factors standing behind the ETH bullish structure – and may all be crucial for a high in the near term.