Ethereum and Bitcoin: Here’s a look at what this cycle has in store for us.

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Ethereum, the world’s second-largest cryptocurrency, hit repeated ATHs over a 20-day period between the end of April and the start of May. However, the cryptocurrency quickly fell to the 19 May carnage. At press time, ETH was trading in the $2,500 level, demonstrating its precipitous decline since its peak of $4,298 in May.

Over the last month, both Ethereum and Bitcoin have lost more than 30% of their value. However, as compared to the king currency, Ethereum has performed admirably.

Correlation

Ethereum might have decoupled itself from Bitcoin a few weeks back, but now, their correlation has only been increasing. For instance, the coins shared a positive correlation of 0.59 during the first week of May, but the same had risen to 0.77, at the time of writing.

Market Dominance

In the grand scheme of things, Ethereum’s market share has taken an interesting turn. At the start of the year, the alt’s dominance was only 10.79 percent, while Bitcoin’s was far over 70 percent.

The situation may not have entirely transformed in six months, but things have clearly shifted in Ethereum’s favour. BTC’s dominance (41%) has now been reduced by nearly half, while ETH’s dominance (19.32%) has nearly doubled since January.

Commenting on the same, popular investor and analyst Lark Davis recently said,

“That is very very interesting statistics [for Ethereum]. You can really see where the crowd is starting to find interest, where the money is starting to flow and what this cycle is presenting for us.”

Institutional flows

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The declining institutional demand for BTC has coincided with a parallel rise in institutional appetite for Ethereum. On Coinbase, the exchange preferred by institutional investors, ETH registered a notable spike in the amount of outflows. On 8 June, for instance, over 395.9k ETH was transferred.

Source: CryptoQuant

On the contrary, as previously analyzed, institutional Bitcoin flows registered a decline during the first quarter of 2021, when compared to the last quarter of 2020.

Volumes traded

An interesting ETH trend has emerged over the past few days. The alt has been settling around 4 times more on-chain volume every day than Bitcoin. What’s more, the recent stablecoins transfer volume on ETH also passed the total BTC settlement value. Highlighting another interesting feat that ETH recently registered, Davis pointed out,

“In the last 24 hours In the last 24 hours total Bitcoin volume was 44 billion, total Ethereum volume was 46 billion. This is not the first time! Money is shifting towards ETH.

In May, ETH had the greatest trading volume across all major exchanges. Volumes on Coinbase and Huobi showed a significant disparity. On the other side, while ETH volume surpassed BTC on FTX and Binance, the difference was not as noticeable.

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Is money actually shifting towards ETH?

Keeping the aforementioned considerations and the developing tendency in mind, absolutely. Indeed, according to Davis, ETH will surpass the $10,000 milestone sooner than predicted, surprising everyone.

Furthermore, Tegan Kline, Co-Founder of Blockchain startup Edge & Note, recently stated,

“Ether will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest.”

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