This article is also available in Spanish.
ethereum (eth) is gaining prominence as bitcoin maintains its recent highs. Despite <a target="_blank" href="https://www.coingecko.com/en/coins/ethereum” target=”_blank” rel=”nofollow”>eth Currently 36% below its 2021 all-time high of $4,878, analysts anticipate that the second-largest cryptocurrency by market cap may be gearing up for a significant turnaround.
Related reading
The ethereum ecosystem is a hive of activity, with institutional investments rising, ETF interest rising, and trading volumes increasing.
From 1.1 million recorded three months ago, daily transaction volumes on ethereum have increased to 1.22 million, a notable increase according to the latest statistics from IntoTheBlock.
<blockquote class="twitter-tweet”>
bitcoin has been the star of this rally, but what about ethereum?
Historically, ethereum has been one of the first assets to benefit from the profit rotation following the bitcoin move.
Currently, ethereum on-chain activity shows evenly spaced potential resistance levels, but in… pic.twitter.com/amkbZmtEyo
– IntoTheBlock (@intotheblock) <a target="_blank" href="https://twitter.com/intotheblock/status/1859558492211666999?ref_src=twsrc%5Etfw” rel=”nofollow”>November 21, 2024
Although the increase is not substantial, it indicates that network usage is consistent. This constant activity serves as the foundation for ethereum's long-term value and underscores its continued importance in the cryptocurrency sector.
Institutional investors place bets
Last week, institutional buyers purchased over $1.4 billion worth of ethereum (eth), causing a stir in the crypto community. Over the same period, $147 million has been invested in ethereum spot ETFs. This shows that people are becoming more optimistic about the future of eth.
<blockquote class="twitter-tweet”>
<a target="_blank" href="https://twitter.com/hashtag/ethereum?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#ethereum the whales have bought more than 430,000 <a target="_blank" href="https://twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$eth in the last two weeks, worth more than 1.4 billion dollars! pic.twitter.com/n7iTTADuax
—Ali (@ali_charts) <a target="_blank" href="https://twitter.com/ali_charts/status/1857130376889598200?ref_src=twsrc%5Etfw” rel=”nofollow”>November 14, 2024
The increase in activity continues; ethereum ETF trading volumes hit a record $1.63 billion last week, representing a 44% weekly increase.
According to analysts, this rise is consistent with patterns seen in bitcoin ETFs, which experienced an initial period of stagnation, followed by a period of sustained growth.
In response, the price of ethereum skyrocketed, rising 25%, marking the largest weekly gain in six months. Many people see these changes as signs that ethereum is gaining speed, which could possibly lead to more profits.
Changing Landscape: Layer 2 Solutions
While there are positives, the growth of the ethereum network sends a mixed signal. New eth addresses created are lower than those seen in previous bull markets.
Experts believe the reason for this is Layer 2 options such as Base. Because these technologies are built on top of ethereum infrastructure, transfers can be made faster and for less money. This makes it less important to connect directly to the main ethereum chain.
However, the importance of ethereum has not been overshadowed by <a target="_blank" href="https://ethereum.org/en/layer-2/” target=”_blank” rel=”nofollow”>Layer 2 growth. Tokens remain indispensable in the decentralized finance (DeFi) and nft ecosystems. This expansion actually strengthens the fundamental function of ethereum while increasing its scalability and accessibility.
Related reading
<blockquote class="twitter-tweet”>
eth is becoming less correlated with btc.
The 180-day Pearson btc–eth correlation is at its lowest level in three years. A 10% increase in <a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin could result in only a 3% profit for <a target="_blank" href="https://twitter.com/hashtag/ethereum?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#ethereum.
Just because btc is strong doesn't mean you should buy eth. Each asset now follows its own path. pic.twitter.com/4Dn4QoInXo
– Ki Young Ju (@ki_young_ju) <a target="_blank" href="https://twitter.com/ki_young_ju/status/1858902741030236311?ref_src=twsrc%5Etfw” rel=”nofollow”>November 19, 2024
ethereum dissociates from bitcoin
The autonomy of ethereum from bitcoin is increasingly evident. The 180-day correlation between the two cryptocurrencies has plummeted to a three-year low, falling below 0.5. This change, according to analysts, indicates that ethereum is now more influenced by its distinctive market dynamics than by bitcoin's price fluctuations.
The need to independently evaluate Ether's potential is increasing as it continues on its own course. ethereum is proving that it is more than just bitcoin's counterpart – it is forging its own path in the cryptocurrency world, whether through the adoption of Layer 2 solutions, institutional interest, or increasing ETF activity.
Featured image of DALL-E, TradingView chart
<script async src="//platform.twitter.com/widgets.js” charset=”utf-8″>
