Following Bitcoin’s recent double-digit rally, signs now point to an impending bear trap for the world’s most popular cryptocurrency. Despite a few tell-tale indicators suggesting BTC may be headed south, a strong Ethereum may yet lend Bitcoin a hand. Ethereum is currently trading in a strong bullish trend which could prove useful for Bitcoin.
The Ether Effect
Over the past day, Bitcoin prices rose by approximately 4% but many were not expecting the coin to move in a positive direction due to the bull traps that were evident. The lower highs being one of those indicators as it indicates the same kind of aggressive selling behaviour that normally pushes prices down.
This surprising turn for Bitcoin was a strong indication that forces other than Bitcoin’s own were at work. Many, of course, point towards Ethereum as the most likely source of confidence.
While it seems clear that Ethereum has had a positive effect on Bitcoin over the past couple of days, the question must be asked whether Ethereum will be strong enough to continue the trend. If it can, Ethereum’s momentum will help Bitcoin keep from going into a reversal.
If Bitcoin decides that it will go its own way, however, there is also a chance that a serious dip in price for BTC could slow Ether’s role considerably. Good times or not, Bitcoin is still the most influential coin in the crypto space, with Ethereum coming in second (according to many).
One popular crypto trader and analyst, Chase_NL, presents the same question, stating that future trade setups should take this relationship into close consideration.
Factors Supporting Ethereum
There are many factors supporting the current bull case for Ether. One of those being heavier use of the Ethereum blockchain infrastructure. There is also the upcoming release of ETH 2.0 which seems to have done wonders for the coin’s popularity in recent months. Added to that the fact that Ethereum has managed to recover nearly 115% in price since the March 12th crypto fiasco, and we have a very strong case for Ethereum but also for other cryptos as well - namely Bitcoin.
That’s great news for BTC because at the moment the coin appears to be setting up for a sizable correction, and maybe even a bearish reversal. Bitcoin’s daily charts are showing some lower highs as of late which is a situation that most would call bearish. In contrast to Bitcoin’s lower highs, Ethereum has been enjoying a series of higher highs over the past three days.
The higher highs are significant not only because they show strong bullish sentiment from crypto investors but also because they seem to be large enough gains to boost confidence for Bitcoin as well. In fact, many analysts have mentioned the possibility of Ethereum’s rally being strong enough to boost the entire crypto market. Will Ethereum be able to lend Bitcoin a hand? Only time will tell but we are sure to find out over the next day or two.
More Ethereum Network Use and ETH 2.0
Ethereum’s strong bull run is not new, by any means. Since the beginning of the year, the world’s most popular altcoin has been on a steady rise. When the entire crypto market slipped as a result of multiple world events, Ethereum, as well as coins operating on its network, fell considerably lower than Bitcoin - as much as 2% more, in fact. Since March 13th, Ethereum has done a fantastic job recovering from those losses and currently looks better than Bitcoin in terms of the road to pre-March 12th levels.
Still, Ethereum has a bit further to go than Bitcoin to get back to previous highs. Bitcoin is still trading at nearly 65% lower than highs experienced a little over a month ago, while Ether is still 87% away from that target. More headroom means more growth potential, but so does the fact that the altcoin is currently oversold.
Add to that the fact the ETH 2.0 will likely be a reality in July 2020, and it looks like the sky’s the limit for Ethereum at the moment.
According to many sources, including a tweet from Colin Talks Crypto, a popular cryptocurrency analyst, the July 2020 release date for ETH 2.0 seems to be a near-done deal.
ETH 2.0 should be considered a next-gen version of Ethereum and was designed to accomplish many goals for the popular blockchain. For starters, ETH 2.0 will correct many of the flaws and redundancies in the current version of Ether making it faster, more secure, and more dependable as a payment and funding tool.
Essentially, Ethereum is set to become a much more powerful and future-proof cryptocurrency than it’s ever been. It’ll become one that will easily rival any other crypto - perhaps even surpassing the ‘competition’. By bringing in several new features, such as sharding, Proof-of-Stake consensus, a new method of executing network script, several scalability features and much more, the likelihood of Ethereum taking on a variety of new roles has never been higher.
As if Ethereum needed any more support, there is also the increased demand for stable coins (coins pegged to the value of specified fiat currency) which are built using Ethereum smart contracts. Stablecoins have a lot of useful features, but one of the most significant currently is the fact that they - along with many other tokens and coins built on Ethereum - provide a bridge across divides separating fiat and crypto, and even blockchain to blockchain. Ethereum has done very well to position itself in a very good place when considering future use-case scenarios.
Many other top analysts are currently making it known that they are more bullish on Ethereum than Bitcoin, so there may be enough steam in the altcoin engines to drive things forward.
At the moment, it seems that Ethereum is doing wonders for the crypto space in general, and Bitcoin seems to be enjoying the additional support. Whether Ethereum’s momentum proves to be strong enough to stop Bitcoin from slipping is a difficult scenario to predict, but if Ether is able to lend Bitcoin a hand over the next few trading days, we may see those huge gains many analysts have been calling for over the past few days.
Stay tuned for updates relating to Ethereum, ETH 2.0, Bitcoin, and many others.