PRESS RELEASE: Ethereum Breaks Out Versus Bitcoin – Where Does ETH Go Next?

The native crypto of the Ethereum blockchain network , Ether, has achieved another higher high, as its momentum continues to strengthen. The ETH price achieved this new all-time high on January 25, 2021.

Simultaneously, technical analysis indicates that the ETH/BTC pair is breaking out of its multi-year drop hitting its highest levels since September 2019. That comes as great news for the general altcoin market.

ETH/BTC weekly candle chart (Coinbase). Source: Tradingview

The latest higher highs come barely a week after ETH/USD broke past its all-time high, exceeding $1,400 for the first time in three years.

Community Sentiment Is Quite Positive

The sentiment that has developed in the Ethereum market is considerably positive after Ether managed to break above its previous record that was set in January 2018. A long-time Ethereum investor who is the head of marketing at Set Protocol, Anthony Sassano, said that the rally is representative of the groundwork that was accomplished by the developers in the Ethereum ecosystem in the last three years.

During the 2019 bear cycle, Ethereum was hit the hardest compared to the other large-cap cryptos. It constantly underperformed against bitcoin, struggling to gain any significant upside momentum. However, the newfound momentum as a result of the rising demand for decentralized finance (DeFi) has enabled ETH to exceed bitcoin gains in the most recent bull cycle. Sassano stated :

“This may be hard to believe but the main reason I get so giddy about $ETH going up in price is not the profits. It’s the fact that so many dedicated Ethereum community members spent 3 long years building during a brutal bear market. And now their work is being rewarded.”

On-chain data also shows a similar trend together with many other indicators that suggest the Ethereum price rally might only be starting. For instance, based on Santiment researchers, the development activity on Ethereum followed the same trajectory as the price of Ether.

Ethereum price versus Github activity. Source: Santiment

The trend indicates that the current ETH rally is led by strong fundamentals and high developer activity, making it more sustainable. The researchers stated :

“Both #Bitcoin and #Ethereum have made respective runs of dominance over one another here in January. We’ve just noted that each projects’ #Github development activity rate is fluctuating closely to the respective price of $BTC and $ETH.”

What Comes Next?

After this rally has proven its consistency, analysts and experts believe that the momentum of ETH and the Ethereum network’s effect indicates that it is gradually becoming a blue-chip asset in the crypto market. One crypto investor, Alex Saunders, said that most people in the community agree that Ethereum is turning into a blue-chip asset. He said :

“2 year ago $ETH fell 90% in 9 months & hit $80. Most had written it off. Yet here we are at new ATH $1500, it’s network effects are undeniable & most agree it’s blue-chip. Love it.”

Ethereum weekly price chart. Source: TradingView.com, Alex Saunders

In the short term, two scenarios may play out for Ethereum. The price of ETH may rally after the CME futures listing that is scheduled to take place in February, as a result of large institutional capital inflows.

On the flip side, Ether may also experience a pullback after breaking its all-time high, as the ETH/BTC pair momentum takes a breather. For instance, the pair pulled back on January 21 briefly after Ether broke its all-time high in the US dollar pair.

There is also a case to be made that the BTC dominance index starts to rebound after a 2-month-long altcoin season that may push ETH into a consolidation phase in the near-term.

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This is a syndicated post from https://www.cryptovibes.com/blog/2021/01/25/ethereum-breaks-out-versus-bitcoin-where-does-eth-go-next/