Ethereum Becoming Stronger Than Bitcoin: What to Expect
Bitcoin has jumped by almost 9% over the past 7 days, but over the same period, it’s biggest Altcoin competitor, Ethereum, recorded even higher gains of 14% as ETH topped back to psychological levels of $3,000 for the first time since the beginning of March.
With the cryptocurrency market showing signs of bullish sentiment, it seems that investors are getting back a taste for more risky assets than stablecoins, the inflows of which have also increased on crypto exchanges.
“Ethereum demand and adoption are strong”, say the co-founders of Glassnode.
From the Glassnode data that was shared with the Twitter community, it can clearly be seen that Ethereum is currently much more in demand than Bitcoin, based on the total transaction fees generated over the same time period.
The data charts also show that Ethereum is starting to gain ground toward breaking out of the long period of Bitcoin dominance.
2/ ETH/BTC shows that #Ethereum begins to gain ground, breaking out of the long-term #BTC dominance period started in Nov 2021. pic.twitter.com/EmZxBd9s1o
— ?????????????????????? (@Negentropic_) March 22, 2022
In addition to this, interest in Ethereum futures and options has continued to rise, signalling a potential bottom as investors begin to position themselves for the next big move, highlighted the team behind Glassnode.
“Strong demand for ETH calls shows positions are speculative and in this particular case bullish,” they claimed.
4/ Strong demand for #ETH calls shows positions are speculative and in this particular case bullish. pic.twitter.com/l7tQajN51q
— ?????????????????????? (@Negentropic_) March 22, 2022
There are several explanations for such optimism. Ethereum’s major network transition from the Proof of Work (PoW) to the Proof of Stake (PoS) protocol is scheduled this summer, following the final public Ethereum testnet before the migration which happened successfully last week.
The US central bank increased interest rates last week. outlining expectations for a tightened monetary policy to mitigate the historic inflation rates which have surged even more since Russia’s invasion of Ukraine and the resulting severe economic sanctions.
Although this could bring more clarity to financial markets in general, the decision may also come as a double edge sword for digital currencies.
The global economic situation remains unclear, with financial experts forecasting upcoming years of recession. Were this to happen, investors could potentially lose their appetites for high-risk investment assets, which would likely have a strong impact on the cryptocurrency market.
What to Expect
The declining dominance of Bitcoin has historically been considered a good sign for alternative digital assets, for which Ethereum represents as a major force for the Altcoin market as a whole. According to CoinMarketCap, the Bitcoin dominance index is currently nearing 42 percent, while Ethereum’s sits at around 18.6 percent.
More notably, Ethereum has been leaving cryptocurrency trading platforms in record numbers for the past few weeks.
Statistics from Glassnode show that, at the time of writing, there is approximately $26.4 million worth of ETH stored on exchanges, which is the lowest number since May 2019. Historically a decrease in assets held on exchanges indicates that market participants are more willing to buy or to hold than to sell.
Such a sentiment is already being reflected on crypto social media, with multiple voices opining that Ethereum will breakout soon, potentially even rallying into 5-digit territory.
Read more: https://dailycoin.com/ethereum-stronger-than-bitcoin-what-to-expect/
Text source: DailyCoin.com
