Bitcoin has always been seen as the head of the cryptocurrency market, impacting the rest of the cryptocurrencies with its own performance. However, in recent times there has been more of a divergence from altcoins and Bitcoin.
Ethereum is one such coin that has been cutting its own path of late with the second-largest coin by market cap breaking new highs and hitting impressive development milestones. Ethereum recently crossed over $2,000 and is gearing up for a big year with its move to ETH 2.0
PrimeXBT analyst Kim Chua has noted that the ETH/BTC price chart has broken out of its downtrend-consolidation zone last week after the price of ETH rose 5 days in a row, gaining 20% against BTC.
This breakout indicates that ETH will likely outperform BTC in the coming days ahead. Interim resistance at 0.035 BTC has been taken out, and with that level serving as support now, we could see the price of ETH rise significantly against that of BTC for the rest of the month.
Hence, traders may want to accumulate more ETH, or long the ETH/BTC pair to ride the wave. There is a fundamental reason for ETH to outperform BTC – the ETH token burn upgrade will be launching in July.
Additionally, the price of ETH could rally very strongly as more investors come to realise the significance of the event, expects Chua.
According to experts, the upgrade has not been fully priced-in by the market yet. Hence, the upside surprise is higher for ETH than for BTC in the near-term, which will springboard ETH to play catch-up and reduce its distance from BTC.
Bitcoin’s rally through the latter part of 2020 and into 2021 has all been predicated on an increase in mainstream awareness and adoption. However, for Ethereum, the added awareness of Bitcoin has helped, but if the coin is to outdo its older brother, the gains will be based around technological improvements being rolled out this year.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.