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When the year started, Bitcoin had a market cap domination of up to 72 percent. At the time of publication, it had fallen to 46%. Meanwhile, the world’s biggest blockchain has soared, and soared spectacularly, with YTD returns of nearly 100 percent. The market’s altcoins, on the other hand, have outperformed the world’s biggest cryptocurrency with their own astounding returns.
Although Bitcoin’s general bullishness and latest ATHs have played a role in this, it can be argued that another altcoin – Ethereum – has played a larger role in rallying the majority of the altcoin sector.
The world’s largest altcoin has hiked by almost 400% since the start of the year, with YTD returns of 372% at press time. What’s more, like Bitcoin, the altcoin has hit and breached one ATH after the other over the past few weeks and months. Unlike Bitcoin, of late, its uptrend on the charts has been a little more consistent, something that has encouraged the aforementioned alts to hike despite BTC’s insistence on trading within a set price range.
ETH has broken through the $3000-mark in the last four days, before surging through the $3,500-mark.
The magnitude of ETH’s movement indicates that there is a lot of bullishness behind the altcoin’s movement, bullishness that is possibly lacking in the Bitcoin sector.
As a result, the question arises: Is this too sweet to last? Is Ethereum’s price increase likely to last? That is a critical question to ask, particularly if you are a trader or an investor. However, it appears that on-chain metrics are favouring Ethereum for more gains, at least in the short term.
This was the subject of Santiment’s latest Insights report, with the same finding that corresponding to ETH’s price hikes, the social volume associated with the altcoin has shot through the roof too. ETH-related mentions on social media, for instance, grew by over 255% in 10 days. In fact, the social volume for ETH on the 3rd of May went past levels seen in 2017.
Furthermore, when the altcoin reached an all-time high of $3,550 on the markets, ETH’s trade flow balance favoured “coins moving off exchanges more than on.” “This implies a higher chance of continued growth and a lower risk of major selloffs,” according to Santiment. This is because an increasing number of people are returning their ETH to their wallets for HODLing purposes rather than storing them on exchanges for potential sell-offs.
As a result of this discovery, many buyers and hodlers have faith in the long-term price success of the crypto-asset.
The aforementioned discovery and its consequences are backed by the fact that ETH supply owned by top exchange addresses has gradually declined on the charts over the last few months. Furthermore, the top ten non-exchange whale stocks have more than doubled in the last eight months.
ETH has risen sharply over the last eight months, owing primarily to new ETH 2.0 advances and the bullishness of the broader sector. Although non-exchange whale shares of ETH have peaked, smaller retail buyers of the cryptocurrency have also propelled it to new heights.
At the time of writing, Ethereum’s daily active addresses count had surged to 959.64k. A year ago, the figure for the same was as low as 400k, according to BitInfoCharts.
Finally, while ecosystem-centric developments like the progress with ETH 2.0 and the S&P Dow Jones launching an Ethereum index have contributed, what has also fueled such growth is how well DeFi is doing. Decentralized Finance has emerged to become a hit over the past year and since most of it uses the Ethereum blockchain as a platform, the former’s popularity and growth have brushed off on the latter.
This was evident in the last 10 days or so as coupled with exchanges losing supply and falling gas fees, value locked in DeFi doubled in just three months.
In the short term, ETH seems to be poised for more gains on the charts. Its long-term prospects, on the other hand, are a little more questionable due to its close association with Bitcoin. If the bouts of deflation that occurred in April replicate themselves, the alt will see corrections once more.