Why traders say Ethereum will continue to outperform Bitcoin in the short-term


ajax loader

Traders are seemingly expecting Ethereum to continue to rack up gains against Bitcoin. The ETH/BTC pair has been rallying throughout the past two months, ever since ETH achieved a new all-time high.

What’s behind the optimism around Ethereum?

There are several major technical and fundamental reasons behind the overall positive market sentiment around Ethereum.

First, the CME Ethereum futures market listing has buoyed the momentum of ETH. More institutions have access to an institutional vehicle they can use to gain exposure to BTC.

Second, Ethereum has been portraying a bullish market structure after breaking out of its all-time high and against the Bitcoin pair.

A pseudonymous trader known as Crypto Capo said:

“I see many jokes about $ETH. The truth is that it has been trending up against $BTC since September 2019 and each impulse is stronger than the last…”

One key reason Ethereum has been seeing an impulse rally after another is the accumulation of BTC by Grayscale.

In the past few days, for instance, Grayscale bought 20,000 ETH, which catalyzed a bull run for ETH at a time it was stagnating due to declining momentum.

Another pseudonymous trader known as Rookie said he anticipates ETH to perform strongly against Bitcoin in the foreseeable future.

If ETH moves against the Bitcoin pair as seen in the tweet above, the probability of ETH rallying towards $2,200 to $2,500 in the foreseeable future increases rapidly.

Fundamentally strong too

Fundamentally, Ethereum is in a prime position to continue with its rally due to the overwhelming demand for ETH.

ETH is used as gas or a form of money to pay transaction fees on the Ethereum blockchain network.

Due to the explosive growth of DeFi, the demand for gas has increased substantially in recent months.

The amount of ETH held on exchanges has declined significantly as well, indicating that the supply of ETH is dropping while the demand for it is rising.

The combination of these fundamental factors are continuing to fuel the rally of ETH. In the foreseeable future, there are no clear fundamental reasons to anticipate the rally to slow down.

Since the total value locked in DeFi continues to expand and the overall user activity across DeFi protocols is skyrocketing, the probability of an ETH correction in the short term remains low.

As CryptoSlate reported, the CME Ethereum futures market is also seeing a substantial increase in daily trading volume.

High open interest and daily trading volume in the CME futures market would directly indicate institutional demand and interest. Hence, as long as these metrics remain high, the sentiment around ETH would remain highly optimistic.

The post Why traders say Ethereum will continue to outperform Bitcoin in the short-term appeared first on CryptoSlate.

Source: Why traders say Ethereum will continue to outperform Bitcoin in the short-term

Add a Comment

Your email address will not be published. Required fields are marked *