Ethereum’s market capitalization of almost $320 billion, at press time, was less than half of Bitcoin’s own market capitalization. This, despite the fact that Bitcoin continued to remain rangebound below the $40,000-level. Here, it’s worth looking back at a time when Ethereum’s market capitalization hit half a trillion and the flippening narrative became popular.
Despite Bitcoin’s dropping market dominance, not all maximalists have accepted the possibility of ETH flipping Bitcoin, however. While that may be the case, the countdown has started on platforms like blockchaincenter.
Based on the attached chart, the possibility is getting real with every passing day. The war waged by Ethereum continues as altcoins and DeFi projects fight for a place among the top cryptocurrencies in the market. Due to Ethereum’s relatively high correlation with Bitcoin, the two assets rallied side by side, until Ethereum’s regular updates and increased network activity and trade volume took over.
At the time of writing, despite the correlation between the two, Ethereum network’s activity seemed to be regularly exceeding that of Bitcoin, with the same fueling increased investment inflows, likely investments siphoned off of Bitcoin.
This is made more evident from the increasing average age of fiat invested in Bitcoin. During the previous bull runs, in 2017 and the rally two months ago, the average age of fiat invested was dropping, signaling a rise of new traders entering the market and buying Bitcoin against fiat. However, the increasing dormancy right now is a concern for Bitcoin’s price and its ongoing efforts at a full recovery.
In the case of Ethereum, the volume of Ethereum staked is increasing every day and this is fueling the bullish narrative against concerns of Bitcoin’s price drop. Additionally, the percentage supply on exchanges is dropping too, making it likely that Ethereum’s price will continue to rally. In the case of Bitcoin, the flash crash signaled a change in trader sentiment, shifting it to bearish in the short term.
The social volume, market dominance, and trader sentiment have been bullish for Ethereum and altcoins. Based on this, the flippening becomes more likely in the short term as Ethereum rallies towards its ATH once again. Unless Bitcoin’s price sustains a breach of the $40,000-level and demand increases, it is unlikely that the market capitalization will be influenced significantly in the short term.