If Bitcoin clears $70,000, how soon will Ethereum surpass $5,000?
As Bitcoin surges toward an all-time high (ATH) of nearly $70,000, analysts are closely watching Ethereum, the world’s second-largest cryptocurrency, to see how quickly Ethereum will follow suit, with a price of around $5,000 printed in late 2021. Wondering if it will break the ATH record.
How will Ethereum react if Bitcoin passes $70,000?
Here’s what one analyst posted on Platform highlight This is the difference in the positions of the two coins compared to the last time Bitcoin surpassed its 2017 high of $20,000 in December 2020. At the time, Ethereum was trading at $600, 57% lower than its previous ATH of around $1,400.
As Bitcoin approaches its record high of around $70,000 registered in December 2021, Ethereum is approaching $4,000. But the difference between then and now is that ETH is about 36% short of ATH of about $5,000.
The question for analysts is how quickly ETH will surpass $5,000, given its historical performance. When the price of Bitcoin surpassed $20,000 in late December 2020, analysts note that it took ETH about two months to sweep $1,400 and hit a new high.
The boom following this breakout took ETH to around $5,000, fueled by retail activity primarily centered around decentralized finance (DeFi) and non-fungible token (NFT) minting.
Looking at the Ethereum price action on the daily charts, it is clear that buyers are in control. ETH price is up about 7% in the last 24 hours and 15% in the past week, according to CoinMarketCap data. However, it remains to be seen how quickly ETH will repeat its previous performance in 2020-2021.
Exploring the possibilities of ETH
As in the past, Ethereum price action benefits from Bitcoin expansion. The resurgence in Bitcoin prices has led to capital flowing into Ethereum, paving the way for a broader ecosystem of DeFi and NFT protocols. DeFiLlama Data show Ethereum has over $56 billion in assets under management.
In particular, almost all major DeFi protocols on Ethereum, including Lido, Maker, Uniswap, and EigenLayer, have recorded strong inflows over the past day, week, and month.
Aside from market-related factors, the Ethereum price is stabilizing on hopes for the final approval of a spot Ethereum exchange-traded fund (ETF). BlackRock is one of the leading asset managers filing with the U.S. Securities and Exchange Commission (SEC).
However, the agency delayed ruling on BlackRock’s application for a spot Ethereum ETF, citing concerns about the network’s new proof-of-stake consensus mechanism. The SEC has expressed concerns that staking, which is at the core of proof-of-stake, could create opportunities for manipulation.
Clear reservations about proof-of-stake are currently casting a shadow over Ethereum’s near-term prospects despite its price rally. Nonetheless, the community feels relieved to realize that the Commission had refused to approve spot Bitcoin ETFs for about a decade prior to January 2024.
Featured image by DALLE, chart by TradingView
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