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The king of altcoins has shared a close association with Bitcoin since forever. Needless to say, every move of the royal coin has had some impact on Ethereum. However, this dynamic is starting to change, and this may bode well for the second-generation cryptocurrency and its investors.
Ethereum Rises Beyond Bitcoin
Over the past two weeks, the crypto market has fluctuated between bullish and bearish. Although on a macro time frame, Ethereum has gained significantly, recouping all losses since June.
In light of improving market conditions, ETH also improved its position and was trading at $1,721 at press time. After the recent rally of 8.1%, the altcoin approached a critical zone. This would set Ethereum up for a rally until Merge arrives on September 19.
Ethereum price action | Source: TradingView – AMBCrypto
The Fibonacci Retracement from the all-time high of $4,811 to the low of $880 has brought forward critical zones for Ethereum, and the altcoin is near one of them. The 23.6% Fib level, which acts as a solid base/support for any rally, coincided. In fact, at the $1,807 price level, ETH looked very close to breaching it and turning it into support.
The reason behind this rise is twofold. The first is the lack of activity from investors as ETH holders have been HODLing for over a month now. The rate at which the token changes hands is decreasing, which is a good thing since trading in such a volatile environment would inevitably lead to losses.
Ethereum Speed | Source: Santiment – AMBCrypto
Since this did not happen, ETH managed to recover on the charts. The same is proven in the natural gas fees of the network.
The lack of traffic last week has led to lower costs which are expected to increase once the Merger FOMO kicks in.
Ethereum has seen a drop in fees | Source: Santiment – AMBCrypto
The second reason is the merger itself, which is sure to bring a tectonic shift to the second largest cryptocurrency. As the update date approaches, the hype also increases, which is why Ethereum’s growth is outpacing Bitcoin’s.
At ETH’s press time price last year, BTC was valued at $41k. Today, he’s struggling to get past $24,000. So if ETH decouples from BTC, it will be in a much better position.
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