ETH season to potentially dominate the entire altcoin market. With its expansion into multiple protocols and trading as an ETF asset, ETH’s importance and dominance are expected to rise significantly.
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ETH Season or Full Altcoin Season
Analysts predict ETH will outperform other tokens and altcoins, which may lag behind. The anticipated 2024 bull market could bring about token fatigue and skepticism toward L2 and L1 tokens. However, an ETH rally might be more sustainable and easier to produce than rallies for other assets.
ETH’s transparency and relatively stable supply since 2022, with 120M ETH in circulation and a significant portion locked in staking or lending protocols, gives it a competitive edge over other high-profile L1 tokens, which still need to demonstrate their ability to absorb major unlocks.
ETH’s Recent Performance
In recent months, ETH has been trading in a narrow range, rarely dipping below $3,000 and stalling around $3,500. Despite this, ETH has survived as a utility token for years, becoming the backbone for DeFi protocols. Its relative stability makes it a preferred collateral source for projects like Ethena and a basis for relatively predictable trading.
A Potential ETH Season
With meme and speculative token seasons starting early in this cycle, much speculative capital has been diverted away from ETH (e.g., the rise of SOL). The BTC ETF has also pulled early-cycle demand from other assets. However, the market seems primed for an ETH season. As Bob Loukas noted in a recent tweet, ETH has been under-appreciated for much of the cycle.
Awaiting ETF Trading Launch
ETH is currently awaiting direction from ETF trades or another event to boost price action. ETH volatility has inched up, with the volatility marker rising to 2.27% from 1.67% in late June. ETH’s market cap dominance has remained relatively constant, between 17% and 18%.
Market Sentiment and Predictions
Most investors remain undecided on ETH, with sentiment swinging between slightly bearish and slightly bullish. This relative stagnation has led some analysts to view ETH as a “ticking timebomb,” ready to rally once ETF price action and inflows begin. ETH recently traded at $3,147.75 during a recovery, attempting to break above its 200-day moving average, potentially signaling a breakout. Consistently high trading volumes above $13B.
https://coinmarketcap.com/currencies/ethereum
Ethereum’s Ties to Other Assets
Ethereum’s network is closely tied to other assets, primarily through altcoin flows into several L2 protocols. Ethereum-based USDT and other stablecoins may remain within the Ethereum market if the asset proves more promising.
Some predictions suggest ETH could trigger an altcoin season if investors are willing to risk smaller, more volatile assets. As we move forward, Ethereum’s role in the crypto market will be closely watched, with many anticipating it to be a key driver in the next major market moves.
Conclusion
To conclude, ETH season is set to dominate the market over the full altcoin season. With its stability, significant staking, and potential ETF trading, ETH is set to be a key driver in the upcoming market cycle, potentially triggering a new altcoin season. Keep an eye on ETH as it could lead the charge in the next major market moves.
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