What a Crypto Sunday? No rest on weekends either. But all fun eh?
ETH / BTC has been on a roller coaster ride of late. Hovering around 0.037 currently, was just about 0.38 yesterday, we saw lows of around 0.023 just couple of months ago and 0.04 just couple of months before that.
Is there a bullish momentum building this time in ETH/BTC? What is driving ETH prices? What do the supply / demand dynamics say? What factors are effecting ETH price? Let’s analyse all these factors. We shall try to come to some thoughtful & logical conclusions here. As always, please remember - do not “Ape” in to ANY positions based on any analysis as this is no financial advise by any means.
Lets look at the DEMAND side first:
Ethereum is Leaving Exchanges to Hibernate in Cold Storage: There are several reasons but the foremost in our opinion is DeFi (Retail) & Smart money(Institutions) both realising that ETH is the next BTC and they do not want to miss this boat. Plus, all the practical use cases and infra being build in Ethereum blockchain as well as other layer 1 solutions gaining momentum are pushing each other - SOL, BSC & DOT leading this race. Rotation - that is guys who have earned HODLing BTC (and Coinbase stock :)), want to move some cash to ETH now. Hence, a clear momentum towards Ether it seems. lets analyse with help of some charts below.
@ethereum on Crypto Exchanges Continues to DROP! In 2018, the same thing happens whereby the price of $ETH surges the most! Also, Berlin hardfork April 14th!!!! #hardfork #eth2 #crypto #blockchain #defi #nfts @VitalikButerin #mainnet #Upgrade #technologyThere is still more room for this to drop and could possibly drop to 15mn. If one were to extrapolate that in terms of prices, you could still see higher prices from here although there are several (bear & bullish) factors to account for as well. We are always concerned about funding rates and deep leverage plays that lead to market corrections. And one-off events like deleveraging post a huge Coinbase like event.
DeFi is Seeding all the Free Lunch & Farming it Too @ 10+ mn locked
Grayscale has an Insatiable Appetite @ +3 mn ETH locked
Ray of hope for Ethereum with the Beacon Chain @ +3.7mn locked in ETH Staking
BSC & Binance - We are just friends but we are here to eat some food straight form the farm with about 0.5 mn ETH locked in BEP-20 tokens
That is about 18mn almost illiquid ETH sitting there and growing.
Demand is clearly explosive and supply is tightening. You know what that means for the price. So does Mark Cuban here:
Conclusion:
More room for ETH to grow as demand is growing much faster vs supply
ETH / BTC should do better from here, perhaps towards 0.5 and then 0.75 but BTC has to hold for that as well and PoS has to go live sooner than later
Other chains are gaining momentum namely SOL, BSC & DOT and some explore there is not a bad choice
Several tools are available to play this including Grayscale, Canadian ETF’s, ETP’s, OTC and not just trading on exchanges like BTC & FTX