Ethereum marked the ground in front of Bitcoin? Indicators show it, but …
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In the past, Ether (ETH) has given false recovery signs.
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It would be prudent not to get too excited about these bullish signs.
Ethher (ETH), the native cryptocurrency of the Ethereum Network, remains above 2,000 dollars, which has revived the expectations that an Altseason could be about to start in the market.
As Cryptonoticia explained, an Altseason or Altcoins season (digital assets that are not bitcoin) It is a period in which these assets record significant growth in their price.
This period usually begins with a strong capital entrance to BTC, which drives its price to new maximums. After the currency created by Satoshi Nakamoto takes off, investors seek greater returns and transfer their holdings to Ether, the main Altcoin for market capitalization.
As ETH wins impulse, enthusiasm grows in the market and a broader speculative demand is activated, which intensifies the upward phase of the rest of the Altcoins.
Now, are there concrete signs that ETH could be starting a bullish cycle that is the beginning of an Altseason?
According to Cryptoquant data, an analysis firm ON-CHAINEthereum’s native currency measured in BTC could have touched background, a clear technical sign that, historically, has coincided with the beginning of a new favorable season for the Altcoins.
The graph shows two key lines to analyze the relationship between ETH and BTC. The black line represents the actual price of the ETH/BTC torque, which constantly fluctuates over time, while the gray indicates the simple mobile average of 365 days (SMA).
During the last week, The ETH price measured in BTC increased by 38% during the last 7 days. This occurs after reaching its lowest level since January 2020 (green arrows).
The firm’s specialists emphasize that “the recent Low Performance of ETH and its possible fund against BTC is reflected in a greater demand for ETH in relation to BTC and a lower sales pressure.”
Cryptoquant also indicated that the relative proportion of volume Spot (in cash) of ETH, with respect to BTC, shot during the past week, reaching the level of 0.89, the highest since August 2024. “This indicates that traders, investors and holders increased their exposure to ETH compared to BTC. This also happened between 2019 and 2021, a period in which ETH surpassed BTC four times,” they said.
On the other hand, in the report it is noted that investors begin to bow down the purchase of ETH through the bags quoted in the stock market (ETF). In this regard, analysts argue: “The growing assignment of ETH probably reflects the expectations of relative higher performance, possibly driven by factors such as recent scalability improvements or a more favorable macroeconomic environment.”
As cryptootics reported, this ETH rise was given In the middle of the general increase experienced by financial markets. Some of the news that generated stability in the macroeconomic context were the commercial agreement between the United States and China, in addition to the speech that Jerome Powell, president of the Federal Reserve (FED), who implied that it has no intentions to harden the policy on interest rates.
To this is added that, at the time of this publication, the rumor that JP Morgan could begin to offer the purchase service (but custody) of Bitcoin (BTC) circulates to its customers. This reactivates enthusiasm, not only by BTC, but also for cryptocurrencies.
Also, and as indicated by Cryptoquant analysts, we must not omit the activation of pein, the most recent update in the Ethereum Network. The initiative promises to optimize the efficiency, scalability and safety of the network, including improvements in account management and optimization of layer 2 solutions (L2).
Ted Pillows, investor and cryptocurrency market analyst, stressed that Pin was positive for the market because ETH “was again deflation.” That is, ETH burning is greater than the emission, due to an increase in network activity, which facilitates the appreciation of the native currency in a context of greater demand.
In this context, Kaiko Research indicated in his weekly report that the activation of pein “triggered a strong rebound, with ETH increasing 25% between May 7 and 9, marking the performance after a stronger update recorded so far, and a clear break with the usual trend of ‘selling with the news’ that usually follows the main updates of Ethereum.”
This is important to mention it because, before the activation of Pin, Kaiko Research had warned: “None of them significantly promoted its price. In fact, the majority were events that promoted the sale of news, with price drops of 12% and 18% in the two weeks after Dencun and Merge.”
The following graph shows the ETH price performance after the activation of pein (blue line), Dencun (black line), Shapella (celestial line) and Merge (orange line).
Attentive! Ethereum has given false signs in the past
As seen in the following trainingView graph, in the past, the price of ETH measured in BTC, recovered after touching a relative floor, but those rebounds failed to sustain themselves over time.
Therefore, although current indicators suggest a possible change in trend, different analysts have another opinion about ETH. For example, the investment firm Two Prime states that ETH is currently behaving more like a memecoin than as a predictable asset.
Through a statement, the firm argues that it will only focus on BTC purchases, since it has shown greater resilience after its recoil from historical maximums, attracting purchases in falls, unlike ETH.
That is, many investors believe that BTC price drops are opportunities to buy at lower prices. This is because Bitcoin It has a limited broadcast to 21 million unitswhich is reduced every 4 years in an event known as the halving. It is a factor that influences in the medium and long term in its price.
Likewise, it should be mentioned that many investors consider BTC as “digital gold”, due to the characteristics that it shares with precious metal: it is a decentralized asset and resistant to the censorship of banks and governments. In addition, it differs from Fíat money because it is not devalued by the broadcast or monetary policies of a central bank.
For its part, ETH has not shown the same fortress in times of economic uncertainty, which weakens its attractiveness in the short term and does so depend on a favorable macroeconomic context.
Two Prime also mentions that the network created by Vitalik Buterin has a strong competition with the Solana network, higher speed and better user experience.
Regarding the performance of the ETFs, although they had a good week after the sin update, it is important to observe the complete panorama. Since its launch, its yield has been much lower than that of the Bitcoin ETFs, which since January 2024 accumulates tickets for more than 41,000 million dollars. In comparison, those of Ether barely reach 2,510 million dollars.
Another issue to highlight is that the price of ETH measured in Fíat money, despite the launch of the ETFs, is still far from its historical (ATH) of $ 4,981, reached in November 2021. At the time of the publication of this note, the price exceeds 2,500 dollars.
About the ETFs, the token Dispatch analysts point out that they face three great challenges. First, the high cost of some products, such as the Grayscale Ethereum Trust (ETHE), which charges an annual commission of 2.5 %, much higher than that of alternatives such as the ETF of Blackrock, with 0.5 %.
Second, Ethereum’s narrative is more difficult to communicate. Unlike Bitcoin, which managed to clearly position itself as “digital gold”, Ethereum fulfills multiple functions: from being the basis for intelligent contracts and decentralized finance (defi), until generating performance by staking. This complexity complicates its adoption, especially among financial advisors seeking simple explanations.
Finally, current ETFs do not include the staking option, which limits its appeal. This function allows users to obtain rewards for blocking ETH, and not being available in the funds, a key advantage of the asset is lost.
In summary, although the recent price rebound has generated enthusiasm, ETH continues to face important barriers to take off at levels never seen before.
