If Bitcoin Clears $70,000, How Fast Will Ethereum Ease Past $5,000?

As Bitcoin soars toward an all-time high (ATH) of around $70,000, analysts are keeping a close eye on the world’s second-largest cryptocurrency, Ethereum, and how quickly it will follow suit and be issued in late 2021. I’m wondering if it will break the ATH record of about $5,000.

How will Ethereum react when Bitcoin crosses $70,000?

An analyst posts on Platform highlight The difference in the positions of the two coins compared to when Bitcoin last broke through its 2017 high of $20,000 in December 2020. At that time, Ethereum was trading at $600, a full 57% below its previous ATH of approximately $1,400.

Ethereum is nearing $4,000 while Bitcoin approaches its record high of around $70,000 registered in December 2021. However, the difference between then and now is that ETH is about 36% lower compared to his ATH of about $5,000.

The question on analysts’ minds is how quickly ETH will fall above $5,000, considering its past performance. When Bitcoin topped $20,000 in late December 2020, analysts noted that it took about two months for ETH to break above $1,400 and hit new highs.

This post-breakout boom propelled ETH to around $5,000, fueled primarily by retail activity centered around decentralized finance (DeFi) and non-fungible token (NFT) minting.

Ethereum price trending upward on daily chart | Source: ETHUSDT on Binance, TradingView

Looking at the Ethereum price trend on the daily chart, it is clear that buyers are in control. ETH price, CoinMarketCap data reveal, up about 7% in the past 24 hours and 15% in the past week. However, it remains to be seen how quickly ETH will repeat its previous feat in 2020-2021.

Explore the possibilities of ETH

As in the past, Ethereum price movements have benefited from Bitcoin expansion. The resurgence in Bitcoin prices has seen an influx of funds into Ethereum, reinvigorating its broader ecosystem of DeFi and NFT protocols.Defilama data show Ethereum reportedly manages over $56 billion in assets.

Notably, nearly all top DeFi protocols on Ethereum, including Lido, Maker, Uniswap, and EigenLayer, have recorded strong inflows over the past day, week, and month.

Ethereum DeFi protocol raises funds | Source: DeFirama
Ethereum DeFi protocol raises funds | Source: DeFirama

Apart from market-related factors, Ethereum price has also been stabilized by expectations that a spot Ethereum exchange-traded fund (ETF) will finally be approved. BlackRock is one of the major asset management companies filed with the U.S. Securities and Exchange Commission (SEC).

However, the agency delayed ruling on BlackRock’s Spot Ethereum ETF application, citing concerns about the network’s new proof-of-stake consensus mechanism. The SEC has expressed concern that staking, which is the core of proof-of-stake, could create opportunities for manipulation.

Clear reservations regarding proof-of-stake are clouding Ethereum’s near-term outlook despite the current price rally. Still, the community was relieved to learn that the commission had refused to approve a spot Bitcoin ETF for nearly a decade, until January 2024.

Featured image from DALLE, chart from TradingView

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