Bitcoin, which reached the bottom in November 2022 after the bankruptcy of FTX, has shown a tremendous performance since 2023.
While BTC has gained nearly 270% since January 2023, the largest altcoin Ethereum (ETH) is performing weaker compared to Bitcoin. Because, ETH has increased by 160% since January 2023.
Evaluating this weak performance of Ethereum, 10X Research founder Markus Thielen said, “ETH’s weak fundamentals become an obstacle for Bitcoin as it blocks the large-scale flow of fiat money into the crypto ecosystem.” said.
Arguing that ETH is the “basket case” of this bull cycle, that is, the dysfunctional and ineffective crypto, Thielen said that ETH also affects BTC and other altcoins due to its weak fundamentals.
Pointing out that Ethereum showed a tremendous performance in the 2020/2021 cycle, the analyst said that ETH was the driver in that cycle.
Stating that this cycle is different from the 2020/2021 cycle due to the weak fundamentals of ETH, the analyst stated that there may be a further decline in the price of ETH.
“Ethereum continues to be the basket case of the current cycle. Surprisingly, BTC and ETH are highly correlated at 95%.
However, Ethereum’s weak fundamentals are becoming a hurdle for Bitcoin as it hinders large-scale money flows into the cryptocurrency market.
In the last 2020/2021 cycle, ETH was the driver as Ethereum was expected to replace the legacy banking system, but Ethereum developers did not react quickly enough. And this failure has caused ETH to remain weak against Bitcoin this cycle.
The weakness of ETH negatively affects the course of Bitcoin due to the high correlation between BTC / ETH. Moreover, weak fundamentals also bring disaster to the Ethereum ecosystem.
The lack of money inflow from ETH is also a reason why the Ethereum price has fallen more sharply than Bitcoin. “In addition, FTX’s transfers are also effective in the decline of ETH.”
What Awaits Ethereum?
In the face of Ethereum’s weak performance against Bitcoin, market analysts other than Markus Thielen also expect a decline in price. Because analysts think that if ETH cannot hold the critical $ 3,100 level, the decline may continue and ETH may fall to $ 2,900.
However, analysts believe that the downtrend may end if ETH manages to stay above $3,100.
Ethereum continues to trade at $3,070 at the time of writing.
*This is not investment advice.
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