Ethereum
Ethereum ready to advance despite lagging behind Bitcoin: Coinbase
Although Ether has lagged its rival Bitcoin this year, Coinbase suggests the cryptocurrency has strong long-term potential and could surprise on the upside. In a research report released Wednesday, Coinbase analysts provided an optimistic view of ETH, highlighting its resilience and growth potential in the evolving digital asset market.
Year-to-date performance: ETH vs. BTC
Ether, the second largest cryptocurrency by market capitalization, has appreciated 29% since the start of the year. Although this performance is remarkable, it pales in comparison to Bitcoin’s 50% rise over the same period. The broader crypto market saw a 28% increase, indicating that ETH is moving in line with the overall market trend, but not surpassing it.
Coinbase analyst David Han notes that “Ether could have the potential to surprise to the upside in the coming months,” highlighting the absence of significant supply-side pressures such as token unlocking or the sale of minors.
Key Factors Supporting Ether
The report focuses on several factors that could increase the value of Ethereum. First, staking and the expansion of layer 2 solutions have significantly reduced the supply of liquid ETH.
“Staking and Layer 2 growth have proven to be important and growing sinks for ETH liquidity,” Han wrote. These mechanisms decrease the available supply of ETH, which could increase its price.
Second, Ethereum’s position as a cornerstone of the DeFi ecosystem remains secure through widespread adoption of the Ethereum Virtual Machine (EVM) and innovations in Layer 2 solutions.
The EVM enables the creation and execution of smart contracts, which are fundamental to the functionality of DeFi applications. This provides a solid foundational context for appreciation.
Another crucial factor is the possibility of spot exchange-traded funds (ETFs) in the United States. Coinbase suggests that the market may be underestimating the likelihood and timing of ETF approvals, which could significantly boost ETH prices.
“We believe the market may be underestimating the timing and likelihood of eventual approval,” the report said, noting that litigation could overturn initial rejections, further spurring speculative interest and investment.
Bullish Patterns Spotted
Analysts have identified bullish technical patterns that support a positive outlook for Ethereum. Technical analysts observed a complete bullish pattern, indicating a potential move higher.
ETH also bounced off the key 38.2% Fibonacci retracement support level around $2,800, a historically significant level that often precedes price increases during bull markets.
Ethereum’s previous peak above $4,000 is considered a major structural turning point, suggesting the start of a new long-term uptrend. Analysts like Titan of Crypto and JACKIS point to these technical indicators as signs of an impending breakout.
Several well-known cryptocurrency analysts have expressed bullish sentiment for Ethereum. CryptoYoddha predicts that Ethereum could surpass $10,000 by the end of 2024, citing favorable on-chain supply dynamics and strong DeFi fundamentals. Michaël van de Poppe expects significantly higher prices in the coming weeks, noting that ETH appears to be in the final leg of its corrective phase.
These optimistic projections are based on Ethereum’s strong fundamental and technical position. The combination of reduced supply-side pressures has maintained DeFi’s dominance and potential ETF catalysts create a favorable environment for Ethereum’s growth.