The cryptocurrency bulls have taken over the cryptocurrency market with Bitcoin and Ethereum posting gains across the board. A year ago, the price action leading up to the end of the year led to new market highs. Predictions are similar, but experts have not yet come to a consensus.
At the time of writing, Ethereum (ETH) is trading at $3,466 with a gain of 2.5% on the 24-hour chart.
In his latest report for Bloomberg Intelligence, Chief Commodity Strategist Mike McGlone believes that the “biggest surprise” will be not seeing higher prices for Bitcoin and Ethereum.
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The two major cryptocurrencies by market capitalization have faced short-term bearish hurdles but with long-term bullish fundamentals. The cryptocurrency ban imposed by China is one of the most prominent examples.
McGlone expects $40,000 to become the new primary support for Bitcoin in the coming months. Conversely, Ethereum could move to a support area of $2,000 to $3,000 in case of any downside risks.
Both cryptocurrencies increased their minimum prices after May, June and July which increased selling pressure in the market.
Ethereum has a significant price tailwind in non-fungible tokens (NFT), financial technology, stablecoins, and decentralized finance (DeFi). Thus, the analyst believes that ETH price is still in its early days of price discovery and is heading for further upside.
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The entry of EIP-1559 added a new bullish factor to the Ethereum chart. According to McGlone:
Demand and adoption are increasing, but our graph depicts a marked difference from last year – a decrease in supply. At the start of Q4 2020, the 12-month rate of change in Mosaic’s Ethereum supply metric was closer to 5%. Now it’s about 2% down due to the recent upgrade
Ethereum Takes Market Share From Bitcoin
Due to its use cases, Ethereum has been able to attract major players and capture a significant market share. As shown below, the second cryptocurrency by market capitalization is starting to look more like a leader.
The digitization of funds and funds, the analyst said, will continue to create demand for Ethereum. In the DeFi sector, the growth has been phenomenal with the total value booked for these assets reaching $100 billion versus the $20 billion recorded in 2020.
On October 4, the No. 2 cryptocurrency market cap was about 20% of the total, versus nearly 10% at the beginning of 2021. Bitcoin’s dominance weakened to about 40% from 70%. Mosaic and Coin Dance data put Ethereum at the top of the food chain, demonstrating the rising value of cryptocurrencies and their importance as the go-to platform for smart contracts, NFTs and decentralized finance.
In this sense, the report claims that investors who have no position in the cryptocurrency market may make a similar mistake to miss the early days of the internet.
