ethereum price surpassed $3,000 on February 20, eclipsing bitcoin's 22% growth; The eth 2.0 staking deposit trends seen this week suggest the gap could widen further.
The media frenzy surrounding the approval of the bitcoin ETF caused the price of btc to outperform eth in the early days of the 2024 market rally. However, this market trend has changed since early February.
As investors place long-term bets, bulls can take advantage of growing eth 2.0 deposits and declining market supply to fuel a rally above $4,000.
ethereum Outperforms btc Despite Record ETF Inflows
bitcoin has dominated the media headlines in recent weeks and rightly so. Since the US Securities Exchange Commission (SEC) approved bitcoin ETFs on January 11, btc has received unprecedented interest from institutional inflows.
As of February 19, after just six weeks of trading, the 10 newly launched ETFs had acquired more than 654,000 btc, worth more than $36 billion. Despite record btc ETF inflows, eth price performance has managed to outperform btc.
The historical price chart shows that btc prices increased by 24.2% in February, rising from $41,864 to a monthly high of $52,985.
Meanwhile, eth price has had a much more impressive performance, rising 33.7% from $2,241 to the $3,000 milestone on February 20, the first time since April 26, 2022.
Investors make long-term bets on ethereum
Thanks to the perfectly executed Dencun upgrade, ethereum has received its fair share of praise from the media.
The on-chain data trail shows that investors playing the long game, staking coins to anticipate profits from an imminent approval of an eth ETF, have been instrumental in eth's skyrocketing price action, which eclipsed btc in February .
Investors withdrew more than $1.5 billion worth of coins last week as they deposited 504,799 eth into eth 2.0 staking contracts on February 13 and 20.
This caused total staking deposits on the Proof-of-Stake (PoS) network to increase to 30,064,242 eth, according to official data pulled from the Beacon chain.
During a bull market, a significant increase in deposits at stake is a positive trend for any PoS network. An increase in staking deposits improves network security and stability amid growing network activity and signals that most large eth investors are looking to play the long game despite elevated prices.
A $1.5 billion increase in eth bets as prices trend toward a 2-year high indicates a rise in investor confidence and commitment to network security.
If this trend persists, the drop in market supply amid rising market demand could see eth price widen its lead over btc in the coming weeks, especially considering the bitcoin network lacks a comparable performance incentive. large-scale betting.
Forecast: Can ethereum Price Reach $3,500?
By extracting data-driven insights from market trends, eth price appears poised for a further rise towards $3,500 in the coming weeks.
However, historical accumulation trends suggest that eth is facing strong resistance in the $3,200 territory.
IntoTheBlock's Global In/Out of Money (GIOM) data groups all existing eth investors by their entry prices. The GIOM shows that 12.9 million existing holders had acquired 4.74 million eth at the minimum price of $3,212.
However, considering this is the largest group of holders who bought eth above current prices, a decisive break above $3,200 could effectively open the door to a larger rally towards the $3,500 mark, as predicted. .
The bears could still invalidate this lofty prediction if the price falls below $2,500. Still, in this scenario, the 5.2 million addresses that acquired 4.1 million eth at the minimum price of $2,548 could set up a significant buying wall.