ETH is one of the largest altcoins that saw an investment surge over the course of the year. Likewise, expectations of an enormous ROI are growing. However, should you expect a huge ROI given current market conditions? Can ETH return to ATH again?

ETH on the rise?

Renowned analyst Benjamin Cowen checked the daily and weekly charts to discuss long-term changes in ETH. On the daily chart at press time, ETH is up 5% to trade at $ 2,337 and on the weekly chart it is up 10%. As such, ETH had its first week of positive graduation in almost a month. However, people shouldn’t expect new ATH this summer.

In order for ETH to have a bull run like it did before, BTC needs to hover above the 20-week SMA (Simple Moving Average) and get closer to its ATH. For now, however, BTC remains below the 20-week SMA and is not a good sign for those expecting a bull market. If BTC falls from here, ETH will follow suit.

Bitcoin below 20-week SMA | source: Benjamin Cowen

When to invest

Now is not necessarily a bad time to buy. While the market isn’t a crisp green right now, that doesn’t mean ETH can’t go up in price. In fact, ETH looks bullish when it closes above the 20-week SMA.

ETH on 20-week SMA | Source: Benjamin Cowen

Additionally, the ETH / BTC pair is currently in a falling wedge. Therefore, in order to bring the ETH / BTC price to new ATH levels, a break of the downtrend line is required. If ETH / BTC is at least 24-25% above its current value, ETH will hit $ 3,000 and trigger a potential bull run. Benjamin Cowen added:

“I would see it that way that I remain relatively cautious until BTC publishes a weekly closing price above the 20-week SMA and confirms this as support.”

ETH / BTC at the new ATH | Source: Benjamin Cowen

Altcoins stagnate when stablecoins grow

Stablecoins are becoming an important part of the cryptocurrency trade and will play a more prominent role in 2021 report, the stablecoin market cap recently hit the $ 111 billion mark, which is 7.7% of the total crypto market cap.

When altcoins hit high levels earlier this year, stablecoins like USDT and USDC were paired with crypto for trading. Even if the market falls into bear territory, stablecoins will continue to grow. The report states:

“The YTD market capitalization growth (YTD) for stablecoins is 3.7x, outperforming the total YTD crypto market capitalization growth of 1.9x.”

Unsurprisingly, USDT continues to dominate the stablecoin market with a stellar supply of $ 62.3 billion. That equates to a market share of 58.56%, while USDC ranks second with an outstanding offer of $ 25.6 billion.

Market capitalization of the top 5 stablecoins and market capitalization growth YTD | Source: Our network

In addition to USDT and USDC, algorithmic stablecoins have created a sizeable portfolio that comprises ~ 8% of total stablecoin market capitalization. That growth was stimulated by new projects like TerraUSD, Fei, Liquidity and Frax that exploded this year.

Stablecoin usage is also powered by the largest altcoin, ETH. The report added:

“ETH has the largest share of the stablecoin pie, with $ 73.4 billion of the $ 111 billion in outstanding shipments spent on this blockchain.”

In addition to altcoins, protocols such as Aave, Curve, and Yearn have also contributed to a significant increase in stablecoins during the current declining season.

Stablecoin usage has always increased in times of declining volatility. With investors re-launching stablecoins during a market crash, this could be a potential sign of a turnaround across the crypto market.

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