STRAT Strategy · Updated April 2026 · ~4 min · For TradingView desktop 3.2.1
Crypto Pairs Trading: ETH/BTC Ratio and Relative Strength
Pairs trading doesn't bet on the market's direction — it bets on the relative strength of two correlated assets: long the stronger, short the weaker, capturing their spread's convergence/divergence. It's a market-neutral idea — when the market rises/falls together, your long and short hedge each other.
The ETH/BTC ratio
The classic crypto pair is the ETH/BTC ratio (search ETHBTC directly in TradingView):
- Ratio rising = ETH stronger than BTC, capital rotating from BTC into alts;
- Ratio falling = BTC stronger than ETH, risk-off, capital back to BTC;
- Do technical analysis on the ratio itself (trend, range) to decide whether to long or short "the ratio."
Execution and risk
Execution: long one and short the other in equal size, earn the relative spread. Risk: correlation can break — in extremes both coins may crash by different amounts, or correlation suddenly snaps, and neutral loses too.
Tip: the key is picking a long-term highly-correlated pair (BTC/ETH, sector leaders). Analyzing the ratio chart is clearer than two separate charts. Equal sizing, keep a buffer — see portfolios and correlation.