"ETH/BTC shows a bullish breakout, and that’s a sign of market-wide risk-on where alternative cryptocurrencies tend to outperform BTC," Katie Stockton, founder and managing partner at Fairlead Strategies, said.
Some crypto investors see bitcoin, the biggest cryptocurrency by market value, and stablecoins as safe-haven assets within cryptocurrency markets – a go-to place during times of stress similar to Japanese yen, Swiss franc, or U.S. Treasurys in traditional markets. After all, bitcoin is the biggest cryptocurrency by market value and most liquid market in the digital-asset space along with stablecoins like tether.
Meanwhile, ether and alternative cryptocurrencies are seen as relatively risky bets similar to growth-sensitive assets like copper, gold, stock markets, Australian dollar.
So a rising ETH/BTC could reflect improved risk appetite in crypto markets. That has been the case in the past and in recent weeks.
For example, bitcoin rallied 12% last week but underperformed almost all crypto sub-sectors, including non-fungible tokens and Web 3.0 tokens. During the same timeframe, ETH/BTC rose over 3%. A similar action was seen from the mid-April to mid-May period.
On Thursday, ether-bitcoin jumped to a two-month high of 0.073, confirming a descending triangle breakout on the daily chart.
The breakout indicates that the consolidation has ended, and the bigger bull run from March lows near 0.03 has resumed.
"ETH/BTC has broken out of a two-month consolidation given recent strength in ether," chartered market technician and CoinDesk reporter Damanick Dantes said. "It's a bullish continuation pattern. Next resistance is seen around 0.8."
In other words, ether and other altcoins could continue to outshine bitcoin in the near term. The technical picture gels well with the narrative that the crypto market is evolving, with investors beginning to bypass bitcoin and going directly into other industry sub-sectors.
The path of least resistance for ether-bitcoin appears to be on the higher side in the wake of the London hard fork implemented on Thursday.
"The notion of ether becoming a deflationary cryptocurrency in the future is now tangible, and the effects on Ethereum’s valuation could be profound,” Martin Gaspar, research analyst at CrossTower told CoinDesk.
With the hard fork implemented, Ethereum now burns a portion of the fees paid to miners, thereby causing a net reduction in the issuance. For example, the blockchain has already burnt or destroyed more than 5,000 ETH since the upgrade took effect Thursday, offsetting about 40% of the 12,000-plus coins mined during the period.
"Ethereum will likely become the favored crypto trade on Wall Street and could see limited resistance towards the $3,000 level," Edward Moya, senior market analyst for the Americas at brokerage firm Oanda, wrote Friday in an email.