The price of Ethereum could rise by almost 40% against the world’s largest cryptocurrency bitcoin in the coming trading sessions according to market analyst Michael van de Poppe. He expects that ETH/BTC exchange rate would jump from its current 0.05-0.06 sats range to as high as 0.07 sats soon. He based his bullish analogy on the pair’s support level at 0.063 sats. The price floor played an important role in maintaining ETH/BTC’s bullish bias during the mid-May 2021’s crypto market crash. It also served as robust support during the pair’s uptrend in the early May 2020’s trading session.
This analogy materialized right as ETH/BTC stretched its price rebound, from its June 27 low of 0.0552 sats, by 21.28%. It showed that more traders preferred to get rid of their bitcoin holdings to seek opportunities in the Ethereum market in recent days. On a year-to-date timeframe, Ethereum already surged by more than 160% against bitcoin.
The transition took cues from the euphoria surrounding the second-largest cryptocurrency’s consensus layer’s transition from its previous, energy-intensive proof-of-work to a more scalable and cheaper proof-of-stake. The project launched the first phase, Phase 0 or Beacon Chain less than a year ago in December 2020. Phase 0 introduced a so-called sharded network architecture to the Ethereum blockchain.
Sharding is a scaling technique that separates the Ethereum network into various groups called shards. The next step is to assign nodes to each shard. These nodes have to monitor and validate their respective shards, thereby removing the need for each node to validate every transition, which is the case in the current proof-of-work consensus.
The next phase that brings this major cryptocurrency closed to proof-of-stake is EIP-1559. The upgrade proposes to replace the cryptocurrency’s “first-price auction” fee model with a new base network fee. It will be possible to modify a base network fee per the network’s demand. It hopes to deal with blockchain’s higher gas and transaction fee. Additionally, it also wants to make Ethereum a deflationary token by burning the base network fee.
Due to impending scarcity, analysts, as well as traders, see huge upside potential in the Ethereum market. The bullish formula is quite simple. Ethereum’s drying supply in circulation against the rising demand would make it more valuable than it is at the moment. And as a result, Ethereum has been rising against bitcoin this year.
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