Ethereum’s native token, Ether (ETH), rallied 20% between Jan. 8 and Jan. 11 but struggled to sustain the $2,600 level. The subsequent 3.5% correction down to $2,560 on Jan. 16 may have disappointed some bulls, but Ether’s price has outperformed Bitcoin (BTC) by 19.5% since Jan. 8. Such gaps are quite uncommon and last occurred in October 2022.
Ether investors question if the $2,500 level will hold, given that the most obvious drivers are not expected in the short term, namely the Ethereum spot exchange-traded fund (ETF) and the planned Ethereum network upgrades. From a bullish perspective, these events present an opportunity for Ether to further decouple from the remaining cryptocurrency market, but they also present a risk if it either backfires or is postponed.
Ether usually does not outperform Bitcoin by 15%
The price of Ether outperforming Bitcoin by 15% or higher in a week is not something common, at least in the past two years. Besides the high correlation between the two cryptocurrencies, 2023 was marked by disappointment with Ethereum’s declining total value locked (TVL) and persistently high gas fees, paving the way for competing blockchains. Meanwhile, Bitcoin benefited from the anticipation of a spot ETF approval, especially after BlackRock joined the race in June 2023.
In fact, the latest instance happened 14 months ago as Ether’s price rallied from $1,305 to $1,615 in the seven days leading to Oct. 29, 2022. After outperforming Bitcoin by 17%, the gap closed in the following 11 days as ETH crashed below $1,100 on Nov. 9, 2022.
Ether/USD (blue) vs. Bitcoin/USD (orange), October 2022. Source: TradingView
A single past instance should not serve as guidance for prices, especially considering November 2022 marked the downfall of the FTX exchange after reports of customer funds mismanagement and a potential $8 billion shortfall. A counter-example includes the 31 days between July 13, 2022, and Aug. 13, 2022, where Ether’s price outperformed Bitcoin by 63%.
Ether/USD (blue) vs. Bitcoin/USD (orange), August 2022. Source: TradingView
ETH rallied from $1,080 to $1,990 during the 31 days ending Aug. 13, 2022, and…
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