Ethereum’s Catch-Up Game Could Spark the Next Major Crypto Rally

It took an epic bear-market collapse and months of sideways trading for investors to finally realize that Ethereum (ETH) could be the bargain they’ve been craving.

The second-largest cryptocurrency by market capitalization has recovered some 180% year-to-date, and may just be getting started. As ether plays catch up, the crypto market’s next major milestone could be on the horizon.

We’re talking $300 billion market cap, a level that has eluded the crypto universe since July 2018, right around the time that ether began to really cave. Unlike its large-cap peers, ETH was fighting an existential crisis following the ICO blowout.

ETH/BTC Turns Bullish

Ethereum’s ETH/BTC trading pair is finally catching up to the ETH/USD cross, a precursor to a more sustained rally for the developer coin. ETH/BTC recently pierced the 0.03 level and is pushing through an upper parallel trendline. As Hacked recently reported, a break above 0.0347 is essential to shake off what’s left of the so-called crypto winter.

How Ethereum performs relative to bitcoin is an important indicator for the cryptocurrency market’s overall trajectory. Read more: Crypto Market Rotation Opens a Bullish Window.

At the time of writing Saturday, the ETH/BTC pair was trading at 0.0302. The technical indicators have turned bearish on the 4-hour chart, largely because of bitcoin’s sudden resurgence late Friday.

Ethereum vs Bitcoin
ETH/BTC, 4-hour chart. | Source: TradingView.

Also read Hacked’s Week in Review: Bitcoin, Litecoin Take the Reigns Again as Crypto Bulls Eye New Highs.

An analysis of ETH/BTC order blocks by cryptocurrency trader Rampage shows that demand for ether is growing. If the trend continues, Ethereum’s holdings against bitcoin could surge by over 70%.

Heavy Accumulation

Evaluating Ethereum against the U.S. dollar reveals other bullish trends. The ETH/USD trading pair is not only approaching yearly highs, its level of accumulation is among the highest in crypto.

ETH/USD

The accumulation/distribution (A/D) line, a volume-based indicator that evaluates supply and demand, shows a clear trend favoring buy and hold positions.

As Hacked’s Kiril Nikolaev recently pointed out, Ethereum has been in accumulation for 286 days (288 now). That’s 100 days longer than Litecoin and more than double bitcoin cash’s accumulation phase.

In terms of fundamentals, Ethereum’s development roadmap is also headed in the right direction. Just last month, the network announced it was allocating $30 million toward several upgrades designed to improve the protocol.

“Over the next year, the Ethereum Foundation plans to spend $30 million USD on key projects across the ecosystem. This budget is insulated against downward ETH price movement.” – Ethereum Blog

Ethereum maintains one of the world’s largest developer communities, but growing competition for smart contracts and decentralized applications has pressured the organization. It remains to be seen whether an aggressive development roadmap will offset fears that ETH may one day become obsolete now that pent-up demand from ICOs is gone.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via TradingView.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi