Over recent weeks, the expectations of a parabolic Ethereum rally have become extremely prevalent.
Due to a confluence of fundamental and technical trends, analysts left and right are flipping bullish on the second-largest cryptocurrency.
Chris Burniske, a partner at Placeholder Capital, for instance, recently postulated that there is a world in which ETH hits $7,500:
“If BTC goes > $50,000 in the next cycle, and ETHBTC returns to its former ATH, then expect to see ETH > $7,500. To the mainstream ETH will be the new kid on the block — expect a frenzy to go with that realization,” Burniske explained, showing how a 3,000% Ethereum rally in the coming years may be feasible.
But according to a top trader at a prominent cryptocurrency fund, it may be a while before Ethereum establishes a new all-time high.
Ethereum Is Unlikely to Hit a New All-Time High Soon
During 2017 and 2018’s crypto bubble, Ethereum was the cryptocurrency in the spotlight. While it didn’t outperform some altcoins, it was seen as the “next big thing” aside from Bitcoin, rallying from under a dollar to as high as ~$1,400 in just around a year’s time.
ETH had rallied so far and so fast that at one point, some were expecting for Ethereum’s market capitalization to surpass that of Bitcoin in an event branded the “flippening.”
Such a powerful rally is unlikely to happen again, though, commentators have said.
Avi Felman of BlockTower Capital branded the ~$1,400 all-time high as a likely “red herring” event.
The rally to quadruple digits, he explained, was driven by initial coin offerings (ICOs).
The initial coin offerings of 2016-2018 mostly accepted Ethereum — and ETH only. This resulted in a parabolic increase in demand for the cryptocurrency as investors sought opportunities to multiply their holdings.
With Ethereum ICOs now largely a dead trend, the biggest demand source for the cryptocurrency is now gone, limiting upside:
“The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH.”
The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH
— Avi (@AviFelman) June 15, 2020
Bitcoin Likely to Lead the Crypto Market
Taking a technical and fundamental perspective, it’s hard not to see why Bitcoin won’t be leading the rest of the cryptocurrency market, Ethereum included.
Last month, Josh Olszewicz, a crypto analyst at Brave New Coin, observed that the Bitcoin dominance chart printed a golden cross. A golden cross takes place when a “relatively short-term moving average crosses above a long-term moving average,” and is often followed by a “bullish breakout.”
Bitcoin is also the “fastest horse in the race” due to the vast amounts of money being printed by central banks, billionaire hedge fund investor Paul Tudor Jones has said.
Featured Image from Shutterstock Price tags: ethusd Top Trader Explains Ethereum's Rally to $1,400 in 2018 Was a "Red Herring" Event
