Comments by Yuri Mazur, Head of Data Analysis Department of CEX.IO Broker:
Ethereum's recent rise is due toseveral strong fundamental factors.The first factor is recalibration of investor portfolios towards altcoins. The cost of bitcoin, apparently, found its equilibrium in a wide range of $ 50,000 - $ 60,000, and while investors are not ready to pay more for the main cryptocurrency due to the presence of cheaper and no less promising analogues.
Moreover, in the medium term,From a purely psychological point of view, the potential for Ethereum to grow from the current $3,500 to $10,000 looks like a more likely scenario compared to Bitcoin, which proportionally needs to reach $160,000 over the same period of time. And the entry price for such a position on Ethereum looks much more comfortable.
The second factor is the presence of a large numbersupporting news from the ETH network. This includes the upcoming launch of Uniswap and the Berlin hard fork and the London hard fork planned in July. As a reminder, last year the Ethereum price faced strong resistance from sellers due to the high cost of online commissions. The current news background indicates the technical adaptation of the network due to the increased load (in particular due to DeFi) and the tendency to lower fees.
Also, let's not forget that ETH/USD receivedstatus of the second cryptocurrency officially traded on the Chicago Mercantile Exchange. This status allows large institutional investors to consider ETH as a full-fledged analogue of BTC.
The third factor, in our opinion, isBitcoin's fundamental weakness. Thus, Tesla announced a reduction of 10% of its investment position in Bitcoin to check its liquidity. Market participants, therefore, received a signal from Elon Musk that the growth of BTC may be temporary, and the same pace of movement should not be expected in the long term. Moreover, Bitcoin continues to remain in the leading places in the information background only due to its status as the first cryptocurrency. No significant news or fundamental data on BTC is being generated, that is, in fact, there is an information lull.
If you combine all these three factors, then growthETH / USD looks expected and predictable. Nevertheless, Bitcoin should not be discounted as well, as its corrective movement is rather a drift within an established range. The growth of altcoins may well have a positive effect on BTC, with the only difference that the upward trend in BTC / USD will be smoother and more modest.
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