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The price of ethereum (eth) has eclipsed bitcoin (btc) over the past week since the US Federal Reserve (Fed) cut interest rates by 50 basis points (bps) on September 18, 2024.
ethereum wins against bitcoin, prelude to altcoin season?
ethereum has had an impressive past few days when it comes to its price action. eth is up 16% to $2,666 since the Fed cut rates for the first time in four years. btc is up 9% in the same period, trading at $63,643 at press time.
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The eth/btc currency pair has risen from 0.0385 on September 18 to 0.0420 on September 23, indicating an increase of almost 9%. It is worth noting that the eth/btc currency pair is a crucial currency pair watched by cryptocurrency analysts to gauge market sentiments towards altcoins in relation to btc.
When eth and other altcoins gain value against btc, this suggests increased investor interest in altcoins, which could signal the start of an “altcoin season.” Conversely, when btc outperforms eth, it may signal a shift toward bitcoin dominance.
It is worth noting that the ethereum futures funding rate has turned positive since the interest rate cut, standing at 0.0058%. according data from cryptocurrency futures trading and information platform CoinGlass.
For the uninitiated, a positive funding rate implies that traders holding long positions (in this case, eth) are paying off short positions, reflecting bullish sentiment in the market. The change in the funding rate suggests increased optimism regarding the future price of eth, likely driven by increased demand and confidence following the rate cut.
That said, investors should be wary of sharp moves in funding rates as this could lead to market corrections amid excessive optimism or due to any change in external factors.
ethereum faces stiff competition from other blockchains
Throughout 2024, ethereum has faced criticism for its lackluster performance relative to its competitors. Even major developments, such as the U.S. Securities and Exchange Commission (SEC) approval of eth exchange-traded funds (ETFs), have been a source of disappointment. failed to significantly boost the second-largest cryptocurrency by market cap.
In contrast, competing smart contract platforms such as Solana (SOL), Binance Coin (BNB), and Tron (TRX) have made impressive strides not only in terms of price appreciation but also in developing ecosystem infrastructure.
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For example, the Solana ecosystem witnessed many developments in Solana Breakpoint 2024 Singapore event recently concludedAmong other announcements, Franklin Templeton unveiled plans to launch a mutual fund on Solana.
Similarly, all eyes are on the release of former Binance CEO Changpeng Zhao from prison on September 29, 2024. Cryptocurrency analysts predict that Zhao's release could spark bullish momentum for Binance's native token, BNB, which has shown incredible resilience despite the exchange's former CEO being jailed on money laundering charges.
With the rise adoption As ethereum’s layer-2 solutions offer high scalability with minimal transaction costs, the smart contract space is expected to become increasingly competitive. eth is trading at $2,660 at press time, up 3.3% over the past 24 hours.
Featured image from Unsplash, charts from Tradingview.com
