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Bitcoin price is approaching $ 16,000, but it is Ethereum that could shine in November

November 7, 2020

Bitcoin (BTC) price is approaching $ 16,000 after hitting $ 15,960 on Binance. After the rally in the dominant cryptocurrency, analysts are now looking at Ether (ETH). The native token of the Ethereum blockchain received further impulses in the last week. After a poor performance against BTC in October, the likelihood of another rally for ETH increases.

There are two main reasons analysts expect Ether to perform well in the short term. First, Bitcoin’s market capital could move towards ETH after the Ethereum 2.0 announcement. Second, ETH recently tested a critical level of resistance, which increases the chances of a wider rally. Given that the altcoin market has historically recovered after an initial Bitcoin rally, the timing of an uptrend in ETH is ideal.

Capital from Bitcoin to Ether?

Since October 21, the price of Bitcoin has increased by around 33%. It broke into major areas of resistance one at a time, starting at $ 13,000. When Bitcoin initially topped $ 13,000, huge whale lumps formed at that level. It was revealed that whales began to actively accumulate BTC, which resulted in $ 13,000 becoming a support zone.

Bitcoin price is approaching $ 16,000, but it is Ethereum that could shine in November
Bitcoin price is approaching $ 16,000, but it is Ethereum that could shine in November

After claiming $ 13,000 as a support level for the first time since July 2019, BTC continued to rise. Over time, $ 13,500 has been confirmed as the next level of support, followed by $ 14,000 and more recently $ 15,000. When Bitcoin started rising, analysts said it was negative for altcoins as it absorbs most of the volume of the crypto market. As a result, during Bitcoin’s rally, many altcoins fell in value against both Bitcoin and the US dollar.

Bitcoin’s overwhelming strength from October to early November hit the altcoin market hard, but Bitcoin’s price action has shown that bullish market sentiment regarding cryptocurrencies has returned. So, A clean $ 15,000 break could result in more capital being diverted into riskier games like Ether.

Denis Vinokourov, head of research at Exchange and broker Bequant, told Cointelegraph that Bitcoin capital it could circulate in the ether and the Ethereum ecosystem. In the last 48 hours, the DeFi market has developed particularly strongly after stagnating since the beginning of September.

DeFi tokens such as Yearn.finance’s YFI and Uniswap’s UNI rose nearly 30% after Ether’s abrupt rally. Hence, Vinokourov stressed that the broader ether ecosystem could soon benefit from the Bitcoin rally:

“All eyes may be on Bitcoin and its surge above the $ 15,000 level. However, the latest update on Ethereum-related developments may see capital shifting back to Ethereum and its broader ecosystem.” . This does not mean that Bitcoin is actively being sold, but the trend of blocking Bitcoin on the Ethereum network can be accelerated and deployed via oversold DeFi and DEX tokens like Uniswap. “

Regarding Ether’s historical trend of skyrocketing after a Bitcoin rally, traders have said that Ether could soon rise against Bitcoin. Michaël van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said the ETH / BTC trading pair had reached a significant area of ​​support. Van de Poppe explained: “It took years, but ETH hit the 0.026 range that we discussed a lot about“and describes it as a great support zone for ETH.

The launch of Ethereum 2.0 plays a role

The launch of Ethereum 2.0 in the near future is critical to Ether’s momentum, as the network upgrade would significantly increase ETH’s transaction capacity. This would allow the new DeFi cycle, if it occurs, to have a long life as it would reduce the risk of network exposures and high transaction fees. Since Ethereum 2.0 supports staking and allows users to assign 32 ETH to the network in exchange for incentives, this could reduce the amount of circulating supply from ETH on the exchanges.

According to the blog post by Ethereum co-founder Vitalik Buterin entitled “Why Proof of Stake”, using Ethereum will reward users with one 15% return. Since the return is based on ETH holdings and not the US dollar, the incentives to wager increase if the price of ETH continues to rise. As, Analysts expect more investors to accumulate ETH for use, which would ease selling pressure on them.

The market and community have been expecting Ethereum 2.0 for several years, but challenges have delayed its rollout. For Ethereum 2.0, due to the complexity of the upgrade, several test networks with an immense test effort were required. The developers of Ethereum 2.0 wrote on the Github page of the Medalla testnet:

“Before such a backbone can be started, we need test nets that mimic the conditions of the backbone as closely as possible. This assumes that stable, long-term and permanent test nets are in operation that are supported not only by a customer, but by several customers, ideally all customers. “

The mood around Ether has developed increasingly positively, since the start of Ethereum 2.0 coincides with several cheap catalysts for ETH. A pseudonymous cryptocurrency trader named “Loma” he showed the fact that Ethereum 2.0 will take about $ 1 billion off the market. If supply declines, the Bitcoin rally will bring significant capital back into the cryptocurrency as the ETH / BTC trading pair forms a bottom formation.

The Ethereum 2.0 excitement has increased after Buterin’s personal wallet sent 3,200 ETH to an Ethereum 2.0 deposit address. According to the official Ethereum 2.0 release notes from coordinator Danny Ryan if there are 16,384 deposits from 32 ETH seven days before December 1stthe Ethereum 2.0 update can begin. After years of research, testing, and implementation, there is finally a release deadline.

The upcoming confluence of Ethereum 2.0, which would benefit the entire Ethereum and DeFi ecosystem in terms of scaling, and the strength of the ETH / BTC trading pair make a rally in November and December more likely. It is also reported that ETH rose significantly to its all-time high of $ 1,419 in January 2018, almost a month after BTC hit its all-time high of $ 20,000.