ETH has seen some recovery moves in the past few days after the crypto market had seen one of the worst months since March 2020. At the time of writing, the second largest cryptocurrency by market capitalization is trading at $ 2,714.

ETH / USD | source: Trade view

According to one report Recently published by Bloomberg Intelligence Senior Commodity Strategist, ETH is on a “bull market path with a higher systematic risk multiplier”. McGlone believes ETH could follow a path similar to Bitcoin in 2017, when the price rose from around $ 1,000 to $ 20,000.

After the recent crash, the market has cooled to speculative levels, with fundamentals remaining strong and bullish to continue the rally. As a result, ETH could be well on its way to surpass Bitcoin’s market cap and take number one in the crypto market. McGlone wrote:

“The long-term trend is for Ethereum to take Bitcoin’s market share. Both have bullish factors, but Ethereum’s platform and use case are more dominant than Bitcoin’s macro-store of value.

This “usurpation” began to appear on a number of indicators. Data from Bloomberg Intelligence shows that ETH’s average 10-day trading volume has doubled.

This equates to roughly 80% of the Bitcoin trading volume since early 2021 and reflects Ethereum’s upward trend towards number one. McGlone wrote:

“Ethereum has to compete with other crypto assets and smart contract platforms, but the No. 2 cryptocurrency won the adoption race as a target for the digitization of money and finance.”

ETH trading volume | source: Bloomberg Intelligence

ether is noNumber one platform for “cThank you crypto gold fever “

BTC and ETH share two favorable growth conditions: global macroeconomic developments lead to low inflation and interest rates; Cryptocurrencies have a decreasing supply compared to an increasing demand.

According to McGlone, Ethereum’s network has another advantage. The platform hosts over 10,000 tokens and is the mainnet for the growing DeFi ecosystem. This has given ETH an advantageous position in the crypto space.

ETH / USD | source: Bloomberg Intelligence

Also, the $ 2,000 threshold could become the mainstay for ETH price if the downtrend continues in the coming days. The previous high at $ 4,000 will act as resistance as price moves back into that location. The above areas could become a “cowshed” for a while as the cryptocurrency enters a consolidation phase. McGlone wrote:

“ETH is returning to an optimistic course just to follow Bitcoin’s 2017 price line. Similar to ETH at the beginning of this year, the top cryptocurrency started at around $ 1,000 in 2017 and peaked at just under $ 20,000. ETH could operate in the $ 2,000-4,000 range from May to October and maintain the same strong bullish plan as Bitcoin did in 2017. “

The dominance of ETH is increasing while the dominance of BTC is decreasing | source: Bloomberg Intelligence

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At current prices, ETH is trading off ATH $ 4,356. After Bitcoin-driven corrective actions in mid-May and the fact that the world’s largest cryptocurrency has not posted any significant gains since then, ETH is nearly 40% below its stated level.

Nevertheless, there is reason to be optimistic about the ETH Prize. While the indices have not favored ETH holders in the past, on-chain metrics and social data seem to be showing signs of normalization, if not upward trends. report This is also reflected in the latest Santiment Insights.

Perhaps the most characteristic feature of ETH price action on the chart over the past few weeks has been the surge in foreign exchange inflows. However, by zooming out on the chart, it is easy to determine the consistent extent of the decline at the same level. Additionally, the final panic selling occurred on the 28th, followed by profit-taking at $ 2,600.

Simply put, the pressure to sell has steadily decreased over the past 10 days, so we probably won’t see another wider sell-off anytime soon.

Inflow of ETH into the stock exchange | source: Mood

The inflow to the stock exchange decreases with the daily active deposits. Indeed, according to Santiment:

“The deposits are also falling. We are still at a relatively high level compared to the entire 6-month period, but we see fewer addresses every day that put ETH on the stock exchange. “

One of the most impressive trading features of ETH in mid-May was the way the addresses performed in response to the drop in prices. For example, while the price fell from over $ 4,300 to just under $ 2,000 from May 14-24, active addresses also fell from nearly 800,000 to just over 150,000.

However, over the last week or so, the index rose gradually despite the fact that ETH was struggling to find an uptrend. In fact, the number of active addresses for ETH is growing faster than for Bitcoin.

Number of active ETH addresses in 24 hours | source: Mood

All of these are signs of normalization, but not the only ones, because the social volume and psychosocial of ETH provide reliable information about what we can expect next from ETH.

The same thing is highlighted in the Santiment report mentioned above, with the same conclusion that altcoin’s social volume, while indeed decreasing, is consolidating at what is considered to be “normal” levels. At the beginning of May, the index rose to astonishing but unsustainable values ​​due to the hype about the world’s largest altcoin.

Moreover, the mood in society shows that ETH holders are again showing “mass doubts” that arose just before the upward move that began in April. Historically, the index has fallen in a similar manner Buy Dip “. “, Drives the price up again.

???? #Ether Traders show signs of impatience and exhaustion as the price plummeted in the low to mid range of $ 2,000. This kind of surrender and mass doubt last happened on April 7th, when $ ETH‘s price will then double in the next month! ???? https://t.co/cJ2KjA6Vk3 pic.twitter.com/YK4dmM9z2F

– Santiment (@santimentfeed) June 1, 2021

“ETH traders show signs of impatience and exhaustion as prices drop in the low to mid-range of the $ 2,000 region. This kind of surrender and suspicion of the crowd was last seen on April 7th, when the price of ETH continued to double over the next month.

It should therefore be emphasized once again that the observations mentioned are signs of normalization, not necessarily a sign that ETH will soon pick up again. In fact, the above indicators should be considered alongside others like the 30-day MVRV – there is still room for a dip into negative territory.

Currently, many argue that Ethereum’s slow scaling is opening up market opportunities for platforms like Solana and Binance Smart Chain. However, with fees falling to their lowest level since January, and given the relative success of Polygon and Arbitrum, it seems likely that Ethereum could get back to normal, at least in the short term.

Minh Anh

According to AZCoin News

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