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Cash flow from Bitcoin to the Ethereum market has significantly contributed to today’s price bump according to Lewis Harland, Decentral Park Capital’s portfolio manager.
After consolidating for the past two weeks, the Ethereum (ETH) market has begun gaining traction over Bitcoin (BTC) during the early New York trading session on Tuesday. According to the latest crypto market data, Ethereum’s price rallied to a 24-hour high of around $1,886, up over 3 percent during the day. With over $30 billion staked in the Ethereum ecosystem, the DeFi ecosystem is currently focused on the upcoming Shanghai Upgrade, scheduled for April 12. Notably, the Ethereum Shanghai Upgrade will enable withdrawals of over 17.9 million ethers staked by more than 561k validators.
Following Ethereum’s recent breakout, the Bitcoins market dominance shrunk by approximately 0.2 percent on Tuesday. While Bitcoin’s market dominance stands at around 47 per cent according to trading view, Ethereum’s share is about 19 per cent. Their dominance is however expected to shrink as more altcoins led by Dogecoin show signs of decoupling.
According to market data provided by Coinglass, more than $12 million has been liquidated from the Ethereum market in the past few hours following the sudden breakout. Furthermore, the breakout has caught many traders by surprise who anticipated the price to retract before continuing with the bull rally.
Analyst Take on Ethereum (ETH) Market Outlook
According to Lewis Harland, Decentral Park Capital’s portfolio manager, the crypto cash flow has recently favored Ethereum against Bitcoin. Nevertheless, crypto analysts are closely monitoring the Ethereum market to ensure today’s spike is a true breakout toward $2000. Moreover, the Ethereum price bump could be a false breakout leading to a stop-hunt on short traders.
$ETH: We haven't seen a 4h close above $1850 since August 2022.
EMAs all look pretty healthy, let's see if this is actually a true breakout. #Ethereum pic.twitter.com/pivr6ppjlE
— Altcoin Sherpa (@AltcoinSherpa) April 4, 2023
According to Harland in a note to investors on Monday, the banking crisis has significantly bolstered the Ethereum market, which is a favorite among many institutional investors seeking to tap into the DeFi ecosystem.
“ETH looks to regain ground against BTC as part of a broader capital rotation play with crypto likely benefiting off broader equity rallies heading into a historically bullish month,” Harland noted.
Nevertheless, the Ethereum ecosystem as with other altcoins faces steep regulatory scrutiny in the United States after the SEC Chair Gary Gensler stated that all digital assets apart from Bitcoin are unregistered securities. According to Gensler, most crypto projects are not decentralized as they purport. Gensler told Congress that most crypto projects have people working on their success.
#ETHEREUM IS NOT A SECURITY CLASS ACTION https://t.co/EjsD0ZHwOG
— John E Deaton (@JohnEDeaton1) March 10, 2023
In Ethereum’s defense, famous crypto lawyer John E Deaton filed a class action lawsuit claiming Ether is not a security. Furthermore, all other altcoins are at risk of being classified as unregistered securities in the United States if Ether and XRP get grouped as such.