Several base-layer blockchain cryptocurrencies that compete with Ethereum—because they are optimized for smart contracts and open-source currency issuance—rallied further up their price charts than ETH during the US election rally. Even Bitcoin gains beat Ether’s on this turn of the markets.
For the 30 days ending Friday, Nov. 22, Bitcoin’s price gained 47%. Meanwhile, Sui Coin (SUI) jumped by 74%, Solana by 56%, and Polkdadot (DOT) rose by 44%, according to data compiled by TradingView. Ether came up short of these DeFi competitors with a 25% increase for the period.
Even though the price of Ether on crypto exchanges marked $3,450 on Saturday, some investors are nervous about its prospects of reaching the $4,000 level by the peak of this crypto macrocycle.
In addition to concerns over the Ethereum platform’s overgrown, mutable code base and byzantine architecture, some analysts have expressed bearish worries about the Ether economy’s fundamentals.
Here’s one of crypto’s greatest tragedies:
Bitcoin, the most stable chain for long-term financial services, lacks the technical chops to provide them.
Ethereum, a chain with the tech to do it, is too mutable and complicated for anything besides gambling.
BOS fixes this. pic.twitter.com/9xPyLgHDER
— Yago (@EdanYago) November 22, 2024
Amberdata’s Director of Derivatives Greg Magadini, for example, said in a note to clients that “ETH faces serious headwinds as the value proposition of ‘sound money’ … has flipped to inflation supply as nearly all DeFi transactions are being executed on L2s … I believe that’s drastically dragging prices down.”
While ETH became a deflationary currency on Sept, 15, 2022, deflation has slowed in 2024 with the proliferation of currency onto Ethereum Layer-2 services. Though it hasn’t really slowed by much on the multi-year time scale.
1. Bullish: ETH/BTC Ratio Turns Again
Here’s how ETH has stacked up against BTC so far in 2024.
Legendary commodities and forex trader Peter Brandt pointed out to followers on Wednesday that the price ratio between BTC and ETH is at a cyclical inflection point, where it has formed a bottom in past cycles. That means Ether prices may soon rise, even as against BTC.
A letter from the grave???? $ETHBTC pic.twitter.com/FALauZ8M7R
— Peter Brandt (@PeterLBrandt) November 21, 2024
“A letter from the grave?” Brandt wrote in a note on X. The veteran commodities trader posted an Ethereum price-to-Bitcoin ratio graph from TradingView that shows how this metric melted up the chart last time it was this low at this time in BTC’s 4-year supply cycle.
Those are bullish technicals for Ethereum as cryptocurrency markets round the calendar into 2025.
2. Ethereum Price Prediction: $6,000 in 2025
Crypto chart analyst Ali Martinez predicts that Ether will outrun Bitcoin up the chart by the end of this macro market cycle. He marks $6,000 as a peak price in his most bullish scenario for Ether in the months ahead. Martinez expects at least $4,000 for Ethereum in this cycle.
#Ethereum $ETH is about to outperform #Bitcoin $BTC!
And here I show you the price targets
— Ali (@ali_charts) November 19, 2024
“Every market cycle has experienced a phase where #Ethereum outperforms Bitcoin,” began Martinez in a note to followers on X Tuesday. “That hasn’t happened yet in the current cycle, but it is certainly on the horizon. As ETH lags behind, there is an opportunity here to buy before it outperforms.”
“Savvy investors are aware of this, and there has been a significant shift in spot Ethereum ETFs,” Martinez wrote, displaying a chart of Ethereum spot ETF inflows from August through Nov. 18. “They went from distribution to accumulation, having amazed over $147 million in ETH.”
Spot #Ethereum $ETH ETFs have experienced a substantial shift over the past two weeks, with the cumulative total net inflow now standing at over $147 million! pic.twitter.com/mAYU1Bid2V
— Ali (@ali_charts) November 19, 2024
In another chart, Martinez exhibited a long-term ascending parallel channel starting in July 2022, which, if continued, could potentially see an Ethereum price above $5,000 by April 2025.
In addition to increasing ETF volume, open interest in Ethereum futures on the Chicago Board Options Exchange also shifted over the same time period.
CBOE Ether futures volume and open interest rose from 3,613 and 6,121, respectively, on Oct. 11 to 16,614 and 13,043 on Nov. 21, according to data from CME Group.
3. DApp Volumes Up 38% in a Month
Another fundamental analysis of Ethereum’s price, in addition to its inflation rate against the US dollar, is monthly active usage of Web3 or decentralized apps secured by its blockchain network.
Dapp volumes for Ethereum are on the upswing along with ETH/BTC reaching a historical inflection point and ETF investor sentiment turning bullish— and over the same calendar span as increasing Ether futures volume and ETF inflows, according to data from DApp Radar.
Ethereum’s DApp volume for the 30-day period ending Nov. 20 was far and away first-in-class among DeFi coins. With $150 billion in volume on its decentralized application layer, Ethereum well outpaced Arbitrum (ARB) in second with $32 billion and Binance Coin (BNB) in third with ($26 billion).
4. ETH Vs. SOL Do-Si-Do Nov. ‘24
We’ll add up the percentage of each base layer coin’s gains over a relevant period in November and their top three meme tokens, and/or L2 utilities, lemme know if you have preference.
Over the multi-year timeframe, Solana went on a stout bull run while Ethereum was in hibernation. That could mean there’s more upside left in Ethereum’s market on the next turn of the cycle.
The relative performance of base-layer ETH tokens, the three most popular Ethereum meme coins, against SOL tokens and the three most popular Solana memes during the US election rally is another signal portent of a paradigm shift in the markets for these competing altcoins.
SOL outperformed ETH during the 30 days ending Nov. 22. Ethereum flowed up the chart 25%, while Solana stacked 53% gains. Still, Ethereum’s top three meme coins outpaced Solana memes overall during the same period.
The cumulative 30-day ROI for Ethereum plus its top three memes was 220%, while the ROI for Solana plus its top three memes was 200%.
That higher percentage gain is nice for the individual altcoin trader holding the Ethereum coins in their bag during this time, but how hard was it for the market to move these economies by those percentages? It depends on several factors, but the market cap is a central indicator of their confluence.
The collective market caps of these Ethereum and Solana economies, were on Nov. 22: $423 billion and $129 billion, respectively. So the extra 21% worth of cumulative ROI on Ethereum coins is more impressive than that of Solana because it’s harder to move the ETH market cap.
Plus, there are those ETH fees, as SOL boosters would be apt to point out.
5. Institutional Backing for Ethereum
In addition to the upward shift in monthly Ethereum ETF net inflows and Ether futures volume in November, institutional investors show a high level of conviction for ETH in the percentage of their held coins that remain stakes to secure the network and earn yield in addition to gains in market prices on cryptocurrency exchanges.
Institutional investors are really into investing in Ethereum—not merely holding Ether but locking it into staking contracts to secure the platform’s economy for yield. That shows a high level of conviction in the product and in its long-term growth prospects.
Earlier in October, Carlos Mercado, a data scientist for blockchain strategy firm Flipside Crypto, pointed out that the number of Ethereum stakers had increased by over 30% over the trailing 12-month period. That figure notched the one million mark for the first time in June.
A recent survey of Ethereum users by Blockworks Research, a blockchain intelligence firm based in New York City, published in mid-Oct. 30, found that 69.2% of survey respondents stake Ethereum, but 78.8% of investment firms or asset managers own ETH stake.
Furthermore, they’re taking extra steps to keep their Ether more liquid as they stake it, with over 52% reporting that they use a liquid staking token. That shows a level of sophistication for these traditional finance participants in the cryptographic smart contract economy.
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