ETH Gains Edge Over The Stock Market, Prepares For New Rally


ETH gains edge over the stock market and it prepares for a new rally according to a new report from Bloomberg showing a bullish thesis for Ethereum and the macro environment so let’s find out more today in our latest Ethereum news.

The Russia-Ukraine conflict and the interest rates hikes are surrounding the markets but the analyst Mike McGlone from Bloomberg believes that BTC, ETH could still come on top. The report claims ETH won an advantage over the traditional assets and McGlone compared the ETH price performance against the Nasdaq 100 which will continue to drop behind the crypto if the conflict extends.

ETH trending downwards on the daily chart. Source ETHUSD Tradingview

The expert claims Ethereum’s rally was supported by a boom in adoption for NFTs and DEFI protocols while in the digital space, the network also supported the deployment of the US dollars in the form stablecoins that are pegged to the value of the currency. McGlone said. More than $176 billion on March 2, the market cap of the top six crypto dollars listed on CoinMarketCap is up by five times from the start of 2021 but we will see little to stop the market cap from hitting the trillions.

As the stablecoins increase, their market cap levels and ETH prices can follow. As seen below, there’s a correlation between the market of stablecoins and the rise of ETH prices. Compared to the NASDAQ index, there seems to be a correlation between the crypto and volatility levels. Ethereum’s 260-day volatility was declining over 2018 and closer to the 3x now, the relative risk of the nascent technology asset is poised to keep on falling if the war increases the recession risks on the stock market volatility.

eth daily
ETH 24-hour Price Chart (SourcE: coingecko)

The correlation with the legacy financial markets, the Nasdaq index can play out against Ethereum, McGlone thinks. If the index trends lower in the upcoming months, because months because of the economic pressure, ETH’s price could break below the critical support at $2000. Ethereum’s increased demand versus declining supply after the EIP-1559 implementation supports the crypto’s bullish fundamentals and in case of further decline, $1700 can hold as critical support. McGlone said:

“If equities drop fast, Ethereum could repeat last summer and revisit about $1,700. Once the weaker leveraged long positions were purged, the resolution was a new high around $4,800 in November.”

As ETH gains an edge against the stock market, the bearish trend for ETH won’t affect its levels of adoption and the number of people that jump into the ecosystem. The data from Mcglone indicates a 76% increase in developers working in DEFI in 2021.

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