Ethereum’s price rally over the past 48 hours notwithstanding, Bitcoin continues to gather momentum on the price charts. Valued at just over $35,300 at the time of writing, many expect BTC to soon climb in an effort to breach the $40,000-level once again.
While Ethereum may have grabbed the headlines, the spotlight, and the investment flow (to some extent), the current market cycle is all about gathering and sustaining volatility and momentum. When it comes to Bitcoin, this may be the top reason why experts are more bullish on Bitcoin than Ethereum. In fact, even as Ethereum continues to emerge as an alternative to Bitcoin, the fees on Ethereum Network remain high.
Hence, Ethereum maximalists relying on technical analysis may soon realize that price discovery may become a challenge since network fees are high. Though the figures for the same are yet to hit the September 2020 level, this will be the challenge posed to Ethereum’s adoption in the long run. Relying on investment flow in DeFi and transaction volume in Ethereum can only take the price so far.
On the contrary, Bitcoin Options worth $3.7 billion are set to expire on 29 January, based on data from bybt.com. According to some on-chain analysts, Bitcoin may attempt to cross $41,000 again, right before the expiry. Further, another reason behind expecting an increase in price before the end of January is that calls in Bitcoin are higher than puts on derivatives exchanges. This is yet another sign that the week may be a bullish one for Bitcoin.
Just as Bitcoin hit its ATH before a drop followed, there may be a drop in Ethereum’s price rally while Bitcoin’s price surges ahead. Institutional buying and demand are at their peak in Bitcoin currently, but the same cannot be said for Ethereum.
Experts are aware that Ethereum’s rally also depends on Bitcoin’s price action due to the relatively high correlation in the current market cycle. The views of both macro and on-chain analysts are bullish for Bitcoin in the short-term. In fact, based on data from CoinMetrics, the percentage of active supply in the Ethereum network was 65.2%. This figure was much higher than Bitcoin’s which had a percentage active supply of 42.3%, at press time.
Bitcoin’s price went from $10,000 to $30,000 in a span of three months and the run to further price discovery and yet another ATH beyond $41,000 may come sooner than anticipated.