Ethereum, having become the top performing asset in the market last month, retested its price below $ 4000 for the time being.
However, in the past few days, Ethereum appears to be bouncing as the stories of the ETH-BTC crash re-fuel.
When the Ethereum price finally passed the $ 4,000 mark on December 19, the market predicted a faster recovery. In fact, there has been speculation that the next rally may take time if ETH falls below $ 4,000. Given the same event, when can we expect a recovery now?
Waiting for recovery?
Even though ETH fell near the $ 3800 mark, Ethereum’s price as a percentage of BTC’s price is still trending up, just 1% off its most recent high of 9%.
A similar reason could be the simultaneous slowdown in the price movement of the two coins, but the percentage that is still keeping up means that ETH outperforms the king coin in terms of price.
Source: Skew
Additionally, a drop in ETH price at the time of writing is almost inevitable as the correlation of Ethereum with BTC increases. Indeed, after Data of Into The Block, the correlation between ETH and BTC rose to 0.75 at the time of going to press, from just under 0.65 in December.
In addition, the supply of ETH on the stock exchanges soared in the last week. This is an indication that there has also been a great deal of pressure to sell.
Source: Sanbase
So does recovery have to wait?
Except for the unexpected
Even if it looks different, the next ETH rally could come earlier. Ground? Well, retail FOMO.
The value transferred in ETH and stablecoins to Ethereum is still skyrocketing. If the quarter does not materialize, the total value paid on Ethereum will have tripled compared to the fourth quarter of 2020 and quintupled compared to the fourth quarter of 2017.
Source: In the Block
In addition, the total amount of fees paid by ETH has increased more than tenfold from $ 430 million in the fourth quarter of 2020 to $ 4.8 billion in the fourth quarter of 2021 to date.
In addition, there was a spike in option calls for $ 7,000 ETH in late January. This means that expectations for the King altcoin remain high despite the recent price declines.
Finally, since HODLers and whales buy ETH at a discount, if the BTC price rises, ETH can recover from these lower levels more quickly.