ethereum's recent lackluster price movement caused many to call it a 'death of eth' as rivals Solana and Avalanche soared.
However, Q4 layer 1 churn was similar to 2021, noted cryptanalyst 'Metaquant' on January 5.
Additionally, Solana and Avalanche are slowing down after weeks of bullish price action, so where will capital flow next?
ethereum rotation begins
The analyst noted that eth is leaving centralized exchanges and that activity on the network is slowly increasing compared to recent weeks.
“The rotation of L1 alternatives to eth has begun: eth's on-chain season is heating up.”
The fourth quarter saw a similar L1 rotation to 2021, but now it's time for the king to play his hand.$SOL and $AVAX they are now slowing down after weeks of BP only going up.
Here's a quick analysis of where the money will flow next
– Metaquant (@QuantMeta) January 4, 2024
The analyst added that in the last ten days, AVAX and SOL have cooled off after their big runs, while eth remained sideways without showing signs of weakness. “The next race will probably be on eth and its ecosystem,” he said.
Furthermore, the activity in ethereum and layer 2 networks have been growing steadily for months. The total value locked across the entire L2 ecosystem reached an all-time high of $21 billion on January 4. according to L2beat.
In addition to Peak TVL, Daily Active Addresses, Layer 2 Rates, and Layer 2 Rates stablecoin market capitalization They have also been increasing constantly.
Since eth prices have lagged as attention was elsewhere, “once the price goes up, everyone will move back into eth and L2,” he said.
“Note that there is no bull run without an on-chain eth season. Therefore, it is a matter of time before this starts to happen.”
Furthermore, embattled cryptocurrency lender Celsius just Announced that eth is not likely to return to creditors.
While this may cause some short-term volatility if they sell, it has been seen as a positive for the ethereum markets without the vampire cloud of Celsius and its huge eth bags hanging over them.
eth Price Outlook
eth prices they have remained stable on the day at $2,242 at the time of writing. However, the asset is down 8% from its weekly high of $2,434 on December 2 as markets cool.
Zooming out, ethereum has been consolidating at current levels over the past month.
Additionally, analysts have been mulling potential price spikes for eth this year. Some see it reaching $10,000 quite easily. This is just double its all-time high from the last cycle, where it made a profit of $4,800 from trough to high.
High-end? 20k. Minimum? 10k.$eth https://t.co/x6rqMzfypd
— CrediBULL crypto (@CredibleCrypto) January 5, 2024
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