Ethereum’s native token Ether (ETH) tumbled to its worst levels in almost two months against the U.S. dollar on May 6 as the rout in financial markets rippled across the cryptocurrency sector. Nonetheless, ETH did fare better than Bitcoin (BTC) with the ETH/BTC pair hitting a three week high.

ETH/BTC daily price chart. Source: TradingView

The Merge impact

Many analysts credited Ethereum’s merge to proof-of-stake from proof-of-work as one of the key reasons behind the capital rotation from Ether to Bitcoin markets, including Toast.ETH, a pseudonymous analyst, who underscored Ether’s ongoing supply reduction as another reason ETH may be currently outperforming BTC.

Interestingly, Ethereum has grown by nearly 250% against Bitcoin since the beginning of its migration to proof-of-stake in December 2020. 

ETH/BTC weekly price chart. Source: TradingView

Eliezer Ndinga, a research lead at 21 Shares, a Zug-based crypto ETP provider, pointed out that “liquid staking” could also be playing a big role in reducing sell-side pressure.

ETH/BTC upside prospects

Technicals indicate ETH/BTC could grow further in May but risks a broader correction overall as its trends inside a rising wedge pattern.

The pair has bounced after testing the wedge’s lower trendline as support on April 30, and is now heading towards the…

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