Ethereum has seen some recovery in recent days, after the cryptocurrency market experienced one of its worst months since March 2020. At the time of this writing, the second largest cryptocurrency by market capitalization is trading at $ 2,823.
A recent report Posted by Bloomberg Intelligence Senior Commodity Strategist Mike McGlone states that ETH is on a “higher beta bull market path.” McGlone believes that ETH could take a similar path to Bitcoin in 2017 when this cryptocurrency is between $ 1,000 and $ 20,000.
After the recent drop, the analyst claims that the market’s speculative excesses have subsided with fundamentals still strong and optimistic for the continuation of the rally. Therefore, ETH could be on its way to change the market capitalization of Bitcoin and take the number one spot in the crypto market. McGlone wrote:
(…) The trend that seems enduring is that Ethereum gains market share against Bitcoin. Both have bullish bases, but the base and use case of No. 2 is a strong complement to the more macro-value storage attributes of No. 1.
Flippening, as some members of the crypto community have called it, has already started to occur on some metrics. Data from Bloomberg Intelligence suggests that ETH’s 10-day average trading volume has doubled.
This represents around 80% of Bitcoin since the beginning of 2021 and indicates a forward trend for ETH towards the number one spot. McGlone wrote:
Ethereum faces competition from other crypto asset and smart contract platforms, but crypto n. 2 has won the adoption race as the choice for digitizing money and finance.
Ethereum, the number one platform for the “cryptocurrency gold rush”
BTC and ETH have two main tail winds for their rise: global macroeconomic conditions, early inflation and low interest rates, cryptocurrencies have a decreasing supply in the face of an increase in demand.
The Ethereum network has an additional advantage, according to McGlone. The platform is home to over 10,000 tokens and has solidified its position as the premier venue for the growing DeFi ecosystem. This has given ETH an advantageous position in the crypto space. McGlone added:
Ethereum is uniquely located as the leading provider of virtual shovels amid the cryptocurrency gold rush.
$ 2,000 could become a key support for ETH price should the downtrend persist for the next few days. The previous high of around $ 4,000 will act as resistance if the price manages to return to these levels. These ranges could become a “bull cage” for a time, as the cryptocurrency enters a consolidation phase. McGlone wrote:
ETH returns to an optimistic trajectory only to follow Bitcoin’s price path in 2017. Like Ethereum earlier this year, the benchmark crypto started 2017 around $ 1,000 and peaked just below $ 20,000. Ethereum could stay within the roughly $ 2,000- $ 4,000 range from May to October and maintain a 2017 flight plan similar to Bitcoin.