Ethereum Shows Its Strength Against Bitcoin, S&P 500: Here's What to Watch

Ethereum ETH/USD overtook Bitcoin BTC/USD in Wednesday's 24-hour trading session, rising almost 5% at one point.

A potential bounce above the day's high at $1,272 looked promising before the Federal Open Market Committee released its monthly meeting minutes at 2:00 p.m. , which led to an initial high level of downside volatility. .

While the Fed has said reducing inflation remains its top priority, the central bank may continue to ease its tightening measures to avoid a recession.

Although Fed language was moderately bullish, the S&P 500 failed to break or fall from Tuesday's trading range. Traders and investors could sit on the sidelines until the Labor Department releases the first unemployment insurance claims at 8:30 a.m. Thursday.

Analysts estimate the number will reach 223,000 for the week ending December 31.

The crypto sector has recently traded in tandem with the general stock market, but Ethereum has shown relative strength, gaining more than 10% since Dec. 19. In contrast, the S&P 500 fell about 0.3. % since that date and Bitcoin has only gained 0.5%.

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The Ethereum Chart: While the S&P 500 and Bitcoin were trading mostly sideways, Ethereum reversed into an uptrend on December 19 and had a consistent series of highs and lows. higher lows. Ethereum's most recent high was printed on December 22 at $1,238.76 and the most recent low was formed at $1,180.44 on December 30.

On Wednesday, Ethereum created another high, but traders will need to see the price action taking place on Thursday to know if the next high has taken place. If Ethereum closes the trading session with a long upper wick, the crypto may trade lower on Thursday.

The second most likely scenario is for Ethereum to form an inside bar pattern on Thursday, with all price action taking place within Wednesday's range. If this happens, the trend is bullish as the crypto was trading higher before forming the inside bar.

Bearish traders want to see strong downside pressure coming in and breaking Ethereum below $1180, which would negate the uptrend.

Ethereum has upper resistance at $1,308.89 and $1,421.80 and lower support at $1,231.28 and $1,081.

Read more: Why Coinbase Crypto-Linked Stock is Booming Today

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