Ethereum ETH/USD is up 8% week-over-week with analysts expecting more upside shortly. However, the currency continues to underperform Bitcoin BTC/USD.
What Happened: The ETH/BTC chart printed 11 red candles in a row, prompting traders to call for Ethereum to further underperform its rival.
Pseudonymous analyst Rager on Jan. 26 highlighted the ETH/BTC chart to show it had not been a “great trade against BTC in a long time.” He added, “The downtrend continues unless ETH can show strength, the spot ETF delay certainly did not help the case.”
But after today’s gains, he tweeted, “Maybe a bottom with rumors of ETH ETF approval and a chance to break the multi-year downtrend for the $ETH/BTC chart.”
Ethereum’s fundamentals could be due a reversal soon, with Bloomberg citing a Standard Chartered report that the Ethereum ETF approval is expected in May 2024, with May 23 being the deadline for the agency to consider ETF applications from VanEck and Ark 21Shares.
Moreover, the SEC postponed its decision to approve Grayscale’s proposal to convert its Ethereum Trust into an ETF. Nasdaq’s request to list and trade BlackRock’s iShares Ethereum Trust was also delayed.
Read Next: Ethereum’s Long-Awaited Dencun Upgrade Sets Final Timeline For Deployment
Why It Matters: Market Research by Layergg in a thread on X highlighted bullish catalysts for Ethereum to enter an “accelerated phase”:
- Ethereum staking is on the rise with 30 million Ethereum staked and more to come.
- Ethereum deflation
- Less Ethereum available on exchanges
- Upgrades like the Dencun Upgrade
Market Research also mentioned the expectation of major projects on the network such as Manta’s TVL of $1 billion and significant Ethereum projects like LayerZero, StarkNet and zkSync, all funded with over $200M and launching tokens in the first half of 2024.
An important factor highlighted in the research is the BTC/ETH correlation which has dropped below its all-time average of 0.71 for the first time since 2021. “The launch of the Spot ETF signals the possibility of ETH breaking away from BTC’s influence and setting its own price,” said Market Research.
What’s Next: Ethereum will be looking to maintain its dominance over Solana SOL/USD, which has emerged as its main rival and is tipped to close the gap.
Also Read: Solana At $105 Has Analysts Bullish: ‘It Will Converge On Ethereum Faster Than Most Believe’
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