While Bitcoin (BTC) has hit new all-time highs in the past few weeks, Ethereum (ETH) has failed to keep up with its strong upward pace. As of writing, ETH is trading at $3,111, down about 36.2% from its 2021 all-time high of $4,878. ETH prices are down 0.6% in the past 24 hours and about 1% in the past week. This performance difference has sparked widespread discussion in the market as to whether Ethereum can catch up with Bitcoin.
However, despite Ethereum’s recent lackluster performance, some market analysts remain optimistic about its future potential, especially analyst Ali, who said on social media that Ethereum will soon surpass Bitcoin and enter a new wave of gains.
What signals does Ali's confidence come from?
Ali's bullish prediction is not unfounded; his confidence stems from several key indicators, one of which is the 'altcoin season indicator.' According to historical data, there is a period in each market cycle when Ethereum's performance surpasses that of Bitcoin. Ali believes that this situation has not yet occurred in the current market cycle, which instead provides investors with a potential buying opportunity.
In addition to the altcoin season, Ali also particularly focused on the MVRV (Market Value to Realized Value) indicator, which is considered an important tool for predicting Ethereum's future performance. The MVRV indicator measures the ratio of an asset's market value to its realized value, helping to determine whether the asset is overvalued or undervalued. Ali pointed out that when ETH's MVRV momentum breaks above the 180-day moving average (MA), it historically usually indicates that ETH will experience a strong rise. Therefore, although ETH's price has risen from $2,400 to $2,800, this crossover has not yet occurred, indicating that ETH still has upward potential.
Increased inflow of ETH spot ETFs, with whale funds also doubling down.
Apart from the potential of the MVRV indicator, Ali also noted that the inflow of ETH spot ETFs has significantly increased. He explained that the flow of investor funds has shifted from mere allocation to accumulation, with ETH spot ETFs accumulating over $147 million worth of ETH. Moreover, the buying behavior of ETH whales has also increased significantly, with whales recently purchasing over $1.4 billion worth of ETH, providing further support to the market.
Future Trends of Ethereum: Will it break through $4,000 or challenge $10,000?
According to Ali's prediction, Ethereum may break through the resistance levels of $4,000 or even $6,000. More aggressive predictions suggest that if ETH mimics the price movements of the S&P 500 index, its target price could even reach $10,000. This prediction undoubtedly injects confidence into the market, but it is also necessary to observe whether the market can sustain this upward momentum.
The market position of Ethereum:
Although Ali's analysis provides an optimistic outlook for Ethereum's future trends, it is still necessary to pay attention to some key indicators to assess whether ETH can truly surpass Bitcoin. Among these, the estimated leverage ratio is an important indicator that reflects the level of leverage used by derivatives market traders. A high leverage ratio typically indicates greater risk and potential volatility, while a decrease in leverage may suggest a reduction in speculative behavior in the market or lay the groundwork for more stable growth.
According to CryptoQuant data, the leverage ratio of ETH dropped to 0.40 on November 19, while this ratio peaked at 0.43 earlier this month. This change may indicate a reduction in speculative activity, and the market may be entering a more stable growth phase.
Additionally, Coinglass data further shows that the open interest in Ethereum has also seen a slight decline, with the current valuation at $17.88 billion, while the total open interest for ETH has decreased by about 30%, down to $31.1 billion. Although this data reflects a consolidation phase in the market, the reduced activity may provide an opportunity for stronger growth in the future.
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