en.bitcoinsistemi.com
Bitcoin, which reached the bottom in November 2022 after the bankruptcy of FTX, has shown a tremendous performance since 2023.
While $BTC has gained nearly 270% since January 2023, the largest altcoin Ethereum ($ETH) is performing weaker compared to Bitcoin. Because, $ETH has increased by 160% since January 2023.
Evaluating this weak performance of Ethereum, 10X Research founder Markus Thielen said, “$ETH's weak fundamentals become an obstacle for Bitcoin as it blocks the large-scale flow of fiat money into the crypto ecosystem.” said.
Arguing that $ETH is the “basket case” of this bull cycle, that is, the dysfunctional and ineffective crypto, Thielen said that $ETH also affects $BTC and other altcoins due to its weak fundamentals.
Pointing out that Ethereum showed a tremendous performance in the 2020/2021 cycle, the analyst said that $ETH was the driver in that cycle.
Stating that this cycle is different from the 2020/2021 cycle due to the weak fundamentals of $ETH, the analyst stated that there may be a further decline in the price of $ETH.
“Ethereum continues to be the basket case of the current cycle. Surprisingly, $BTC and $ETH are highly correlated at 95%.
However, Ethereum's weak fundamentals are becoming a hurdle for Bitcoin as it hinders large-scale money flows into the cryptocurrency market.
In the last 2020/2021 cycle, $ETH was the driver as Ethereum was expected to replace the legacy banking system, but Ethereum developers did not react quickly enough. And this failure has caused $ETH to remain weak against Bitcoin this cycle.
The weakness of $ETH negatively affects the course of Bitcoin due to the high correlation between $BTC / $ETH. Moreover, weak fundamentals also bring disaster to the Ethereum ecosystem.
The lack of money inflow from $ETH is also a reason why the Ethereum price has fallen more sharply than Bitcoin. “In addition, FTX's transfers are also effective in the decline of $ETH.”
What Awaits Ethereum?
In the face of Ethereum's weak performance against Bitcoin, market analysts other than Markus Thielen also expect a decline in price. Because analysts think that if $ETH cannot hold the critical $ 3,100 level, the decline may continue and $ETH may fall to $ 2,900.
However, analysts believe that the downtrend may end if $ETH manages to stay above $3,100.
Ethereum continues to trade at $3,070 at the time of writing.
*This is not investment advice.