Ethereum has been gaining at a seriously rapid pace. While the entire market entered consolidation, over the last 2 days, ETH went up by 18%. While this bullishness is good for investors, it is this bullishness that might just threaten Ethereum.
If this trend continues to remain as it is without any necessary safeguards in place, ETH’s rise could be dangerous.
Ethereum needs Bitcoin
When Ethereum crossed $3,800, it marked a hike of 18.81% in 2 days. In fact, at the time of writing, the altcoin was just under $550 away from its ATH of $4,356, a level that was last seen in May.
Now, that would be a good thing except that ETH is rising quicker than Bitcoin can catch up. This could prove to be catastrophic for ETH investors going forward.
Ethereum is only $300 away from its ATH | Source: TradingView – AMBCrypto
Over the same timeframe, Bitcoin rose by only 3.94%. Thus, if Bitcoin does not match this hike, the market could get rug-pulled. If you observe the market, you’ll see that a lot of this bullish behavior can be traced back to Arbitrum’s mainnet launch, along with the hype around NFTs as well.
What’s more, this bullishness has been specific to ETH only as in the 2 days that ETH rose, investors bought over 184,000 ETH ($9 billion). At the same time, only 16k BTC was purchased ( $790 million ).
Ethereum exchange net position | Source: Glassnode – AMBCrypto
Ergo, the question – Who is driving this bullishness?
It’s not the institutions
It is indeed not. This bullishness is coming from the general public/investors. Apart from the rise in buying, volumes seemed to underline organic growth as about 1.6 million ETH was transferred in 3 days.
At the same time, the Grayscale premium went down from -0.5% to -5.26%, proving the lack of institutional movement.
Ethereum Grayscale premium | Source: Glassnode – AMBCrypto
At the moment, $4000 is critical resistance for the altcoin. Because BTC and ETH drive the crypto-market, their togetherness is important. In the last 20 days, while Bitcoin rose by about 5%, ETH went up by 20%.
ETH “flippening” BTC will remain a distant discussion because right now if the breakout continues and Bitcoin fails to reciprocate, the market could get in trouble.
Worth noting, however, that the RSI was noting a downtick at press time. In fact, it seemed to be heading back down from the OB zone. This could bring the stabilization ETH needs on the charts.
$4000 is a critical resistance for Ethereum | Source: TradingView – AMBCrypto
