The price of Bitcoin continues to rise, why is Ethereum not keeping up?

Bitcoin

The recent performance of Bitcoin has been challenging the entire market to enhance its competitiveness, but so far there is still a gap. For example, although Ethereum, the second-largest cryptocurrency in the market, has been growing, it is not as high as Bitcoin on the price chart. What does this ultimately lead to? Well, this makes the short-term performance of Ethereum continue to weaken.

The recent performance of Bitcoin has been challenging the entire market to enhance its competitiveness, but so far there is still a gap. For example, although Ethereum, the second-largest cryptocurrency in the market, has been growing, it is not as high as Bitcoin on the price chart. What does this ultimately lead to? Well, this makes the short-term performance of Ethereum continue to weaken.

According to data provider Skew, the price of Ethereum relative to Bitcoin has now fallen to a six-month low.

As early as January 2020, the ETH/BTC level had dropped to 1.7% on Skew’s chart. Although the figure was 2.6% at the time of writing, which is much higher than the figure in January 2020, the performance is still a six-month low.

Despite these setbacks, the larger Ethereum community remains positive about the relative growth of digital assets.

When digital assets broke away from the merger period, Ethereum prevailed in July. At that time, Ethereum’s DeFi boom caused the market to rise more than Bitcoin. However, compared with Bitcoin, Ethereum’s performance continued to decline as the BTC rebound began and the DeFi hype gradually disappeared.

Since then, the second largest digital asset in the market has been building a new path for itself, and since July, the correlation between Ethereum and Bitcoin has been declining. Although there has indeed been a recovery recently, there is still a certain gap compared with the level in the first half of the year.

The decline in relevance provides it with an opportunity for independent execution, and can even escape the sudden sell-off in the Bitcoin market. This is obvious when analyzing the following chart of data provider CoinMetrics.

Looking to the future, when Bitcoin is stable, the value of Ethereum may get a chance to rebound on its own. As the development of the Ethereum ecosystem moves forward, encrypted assets will become major players through their intrinsic value.

In 2020, the direction is finally set for ETH 2.0. As it enters a new model, ETH will be burned rather than remitted to transaction validators. This will provide strong support for deflation, which will benefit the growth of assets. Ethereum It will enable participants to ensure the safety of transactions and settlement will increase its value.

Such progress has separated Ethereum from other cryptocurrencies in the market. As more such developments arrive, other cryptocurrencies may continue to operate independently, especially if its relevance to Bitcoin has not climbed to the previous setting. Certain level, and this is worthy of our attention.

The original text comes from ambcrypto, and the English copyright belongs to the original author.

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