After BTC has passed the $15,000 wall, analysts look to Ether for the next bull run
The price of Bitcoin (BTC) is approaching $16,000, having reached a peak of $15,960 on Binance. Following the rally of the dominant cryptocurrency, analysts are now looking to Ether (ETH). The blockchain Ethereum’s native token had a sharp rise last week. After poor performance compared to BTC in October, the likelihood of a new ETH bull run is beginning to increase.
There are two key reasons why analysts expect Ethereum to perform strongly in the near future. First, Bitcoin market capital could shift to ETH following the announcement of Ethereum 2.0. Secondly, ETH has recently tested a critical level of resilience, increasing the chances of wider growth. As the altcoin market has historically recovered after the Bitcoin rises, an upward trend for ETH is plausible.
Is capital moving from Bitcoin to Ether?
Since October 21, the price of Bitcoin has increased by about 33%. It has passed important resistance thresholds, one after the other, starting at $13,000. When Bitcoin initially exceeded $13,000, large groups of whales formed at that level: this shows that large investors started to accumulate BTC, making $13,000 a support threshold.
BTC, however, continued to rise to $15,000, and analysts believe that this development was a negative turning point for altcoins, as BTC began to attract most of the crypto world’s capital. As a result, with the rise in Bitcoin, many altcoins lost value against both BTC and the US dollar.
Bitcoin’s overwhelming growth from October to the beginning of November has dealt a severe blow to the altcoin market, but BTC’s price evolution has shown that there is a bullish sentiment in the crypto industry: at this point, totally exceeding $15,000 could trigger traders‘ desire to invest in something with higher risk, such as Ether.
Denis Vinokourov, head of research at crypto exchange and broker Bequant, told Cointelegraph that capital from Bitcoin Sunrise Review could enter the Ethereum ecosystem. In the last 48 hours, DeFi has recorded a particularly strong performance after the stagnation of early September.
DeFi tokens such as Yearn.finance’s YFI and Uniswap’s UNI have increased by almost 30% after the abrupt recovery of Ether. Thus, Vinokourov pointed out that the wider Ethereum ecosystem could soon benefit from Bitcoin’s growth:
„All eyes are on Bitcoin, at the $15,000 level. However, the recent update of Ethereum could mean that some capitals will return to its wider ecosystem. This doesn’t mean that people will start selling Bitcoin, but the trend to block BTC on the Ethereum network could accelerate, and these currencies could be invested in oversold DeFi tokens like Uniswap“.
Michaël van de Poppe, a professional trader on the Amsterdam Stock Exchange, said that the ETH/BTC pair has reached an important support area:
„It took years, but $ETH has reached the 0.026 area that we have been discussing a lot.
The release of Ethereum 2.0 will have an impact
Key to Ether’s recovery were the ETH 2.0 announcements, as upgrading the network would significantly increase ETH’s transaction capacity. This would allow the new DeFi cycle, should it emerge, to last for a long time because it would reduce the risk of network clogging and high transaction fees. Because Ethereum 2.0 supports staking, allowing users to deposit 32 ETHs into the network in exchange for rewards, it could reduce the ETH offering in exchanges.
According to a blog post by Ethereum’s co-founder, Vitalik Buterin, entitled „Why Proof of Stake“, staking on Ethereum will reward users with a 15% return. Since the rate of return is based on ETH holdings and not on US dollars, if the price of the cryptocurrency were to increase, the rewards for staking would increase with it. Therefore, analysts expect more investors to accumulate ETHs to invest them, which would reduce the selling pressure.
The market and the community have been waiting for Ethereum 2.0 for many years, but some problems have delayed its release. Ethereum 2.0 has in fact required several testnets due to the complexity of the update. ETH 2.0 developers have written on the GitHub page of the Medalla testnet:
„Before such a mainnet can be launched, we need testnets that mimic the mainnet conditions as much as possible. This requires stable and resilient testnets that are supported not by a single client but by multiple clients; ideally, by all clients.
Ether’s sentiment has become increasingly bullish because the launch of Ethereum 2.0 coincides with several favourable elements: a crypto currency trader known as „Loma“ has reported that Ethereum 2.0 will remove about $1 billion from the market. As the offer falls, the Bitcoin rally is bringing significant capital back into the crypto.
The hype for Ethereum 2.0 intensified after Buterin’s personal wallet sent 3,200 ETHs to a deposit address for the new protocol. According to the official release notes for Ethereum 2.0 by Coordinator Danny Ryan, the upgrade to ETH 2.0 can begin if there are 16,384 deposits of 32 ETHs each seven days before 1 December. After years of research, testing and implementation, there is finally an official date.
The approach to Ethereum 2.0, which would benefit the entire Ethereum and DeFi ecosystem in terms of scalability, and the strength of the ETH/BTC pair make ETH growth in November and December more likely.