- Ethereum price correlation with Bitcoin suggests that it has more room to advance further.
- Indeed, Ether has several fundamental factors that may see it go parabolic.
While Ethereum price has been appreciating against the dollar, no significant growth has been made when measured against Bitcoin because the flagship cryptocurrency has stolen the spotlight over the past few weeks.
Skew, a cryptocurrency data analytics provider, reveals that the ETH/BTC trading pair has been steadily declining since September 20. Since then, Ethereum price dropped below 3% as a percentage of Bitcoin price.
The high level of notoriety that Bitcoin has generated may be one of the main reasons behind such market behavior, leaving Ethereum and other altcoins bleeding in respect to the pioneer cryptocurrency.
Among some of the fundamental factors that add credence to Ethereum’s bullish outlook is the number of tokens that have been locked in the ETH 2.0 deposit contract. Additionally, CME’s Ethereum futures listing on February 8, 2021, might be the catalyst that sends this cryptocurrency to new horizons.
It seems to be just a matter of time before the impending supply shock kicks in.
On-chain metrics turn bullish
Several on-chain metrics reveal that the total supply of Ethereum is moving away from cryptocurrency exchanges while Bitcoin is flooding them. Such market behavior suggests a positive shift in investors’ sentiment towards the smart contracts giant as they anticipate a rally in altcoins when BTC loses its momentum.
Ethereum supply on exchanges
Ethereum price remains down by about 50% from its previous all-time high even though it has been trending upwards following the break of the $300 resistance barrier. The 100-week and 200-week moving averages are way below the current price level, accompanied by higher highs and higher lows, confirming that a new bullish cycle has begun.
Nonetheless, Ether may be due for a final correction before its next leg up.
If sufficient buy pressure does not hold, Ethereum price could retest the $443 support level. Moving past this hurdle may cause a further dip towards $360.
ETH/USD 1-week chart
If this movement is validated, sidelined investors will likely take advantage of the downward price action to re-enter the market. A spike in fresh capital may push the smart contract token into a new rally to the $800 mark, which will be the next resistance level to watch.