Ethereum’s startling run through $3,000 and above is far from over and could see Bitcoin’s main rival surpass $5,000 before long, according to expert analysts.
Ether, the native cryptocurrency for Ethereum and the second-largest digital asset by market cap, broke the $3,000 threshold earlier this week as it more than doubled its 2017 all-time high.
Yesterday, Vitalik Buterin’s brainchild reached up and planted a kiss on the cheek of $3,500 before gravity saw it slip down to $3,235. Today, it crawled back up to take a breather on a ledge of support around $3,360.
Many traders will no doubt be expecting ETH to hold track for a while and consolidate before making any determined effort to return to yesterday’s levels, and historical patterns would favour this notion.
However, experts at global exchange Kraken have a far more bullish narrative on the coin that could, one day, challenge Bitcoin’s 12-year dominance of cryptocurrency.
In its latest Market Recap Report, analysis by Kraken Intelligence suggests the ETH rally may still be in the early innings. They report that, even with the most-recent price appreciation, Ether dominance – its share of the total crypto market cap – is only coming close to the 18 per cent multi-year high achieved in mid-February, but remains far away from the +30 per cent achieved at the height of the 2017 rally.
Multi-billion dollar explosion
“The multi-billion dollar explosion in DeFi and this year’s NFT frenzy took place on applications built on Ethereum,” said Pete Humiston, Manager of Kraken Intelligence.
“Past performance does not indicate future prices, but the fact that Ethereum remains resolutely at the heart of bleeding-edge activity and innovation in the industry – just as it did in the previous bull market – suggests ETH has plenty of upside potential.
“With Ether held on exchanges at a 2.5-year low, and institutions warming up to the second largest crypto asset, as well as market participants having locked up more than four million ETH – 600k on Kraken’s secure on-chain staking service alone – ahead of the launch of Ethereum 2.0, the stars are aligning for another significant leg up for the ETH price.”
On page 17 of its 22-page dossier, the report charts “ETH: The Road to $5,200”, and uses a logarithmic regression graph to highlight potential future positions for Ethereum.
“As difficult as it will be for ETH to sustain double digit returns, the case could also be made that ETH still has plenty of upside,” the accompanying notes state.
“Since hitting a multi-year high of ~18 per cent around mid-February, ETH’s dominance has mean reverted down to 12 per cent and had largely trended sideways.
“The fact that ETH continues to climb higher while retaining the same market share suggests that ETH has yet to take off.”