Market Wrap: Ether Hits New High, Outperforms Bitcoin as Altcoins Rally

Categories: Bitcoin

Market Wrap: Ether Hits New High, Outperforms Bitcoin as Altcoins Rally

Ether, the world’s second-largest cryptocurrency by market capitalization, reached a new all-time price high of around $4,400 on Friday, topping the previous record high of $4,379 in May, according to CoinDesk data.

ETH is up about 11% over the past week, compared to a 3% rise in BTC over the same period. Technical charts indicate further upside for ether relative to bitcoin, with an upside target toward 0.08 in the ETH/BTC price ratio as discussed in yesterday’s Market Wrap.

Overall, analysts expect further upside for cryptocurrencies for the remainder of the year despite occasional pullbacks, which can lead to choppy trading conditions.

“Bitcoin and major altcoins are experiencing strong volatility on the intraday chart, which is normal at all-time-high levels, like we have seen lately,” Lukas Enzersdorfer-Konrad, Bitpanda chief product officer, wrote in an email to CoinDesk.

“The last negative days failed to damage the overall market structure, and fundamentals further indicate that the long term remains decisively bullish,” Enzersdorfer-Konrad wrote.

Latest prices

Bitcoin (BTC): $62,346, +1.70%
Ether (ETH): $4,394, +3.08%
S&P 500: $4,605, +0.19%
Gold: $1,782, -0.97%
10-year Treasury yield closed at 1.55%

The great rotation

Despite recent volatility, some traders are starting to position for further upside in alternative cryptocurrencies (altcoins) such as ether.

“Lately, there has been an increasing number of conversations among investors around shifting portfolio allocations from bitcoin to altcoins to capture the higher returns alts have provided during more speculative risk-on periods,” FundStrat, a global advisory firm, wrote in a Thursday newsletter.

“The good news (for BTC and ETH price) is that the tides appear to be shifting towards a more risk-on fall in traditional markets,” FundStrat wrote.

Ether’s record high

Ether’s new price high coincided with improving blockchain data. The smart-contract Ethereum blockchain burned more tokens than it emitted in the last 24 hours, thanks partly to strong action in shiba inu (SHIB), CoinDesk’s Omkar Godbole reported.

Shiba Inu, the platform behind the self-proclaimed dogecoin killer, burnt 770.12 ETH, becoming the third-largest ETH destroyer. Uniswap v.2 and Tether destroyed 2,729.22 and 1,248.72 ETH, respectively.

And some options traders are betting U.S. regulators will soon approve an ether futures-based exchange-traded fund (ETF) and so are buying cheap out-of-the-money calls in anticipation of a price rally.

High network demand

The chart below shows the recent rise in the Ethereum gas price, which refers to the cost of performing transactions on the blockchain network.

“Historically, when gas gets expensive, we’ve seen activity spike on alternative L1s [layer 1]. But now that Arbitrum and Optimism are live, L2s [layer two] could wind up being the primary beneficiaries,” crypto research firm Delphi Digital wrote in a blog post.

Altcoin roundup

Decentraland’s MANA surged 80% in 24h: MANA, Decentraland’s native token, surged 80% in one day to a market capitalization of more than $2 billion, CoinDesk’s Lyllah Ledesma reported. This comes after Facebook’s announcement on Thursday afternoon that the company changed its corporate name to Meta to signal an increasing focus on the metaverse, which apparently spurred the jump.
Here’s why a CryptoPunk sold for $530 million: A Twitter bot that tracks sales of CryptoPunks flagged a transaction that showed the sale of one CryptoPunk non-fungible token (NFT) for a staggering half-billion dollars, CoinDesk’s Andrew Thurman reported. But while the purchase would’ve been one of the largest art sales in history, on-chain analysts were quick to point out the sale was just a clever bit of smart contract magic.
XRP gets wrapped by Tokensoft for Ethereum DeFi debut: Tokensoft’s Wrapped is taking a multi-custodial approach by partnering with Hex Trust on wXRP, CoinDesk’s Ian Allison reported. The new connectivity for XRP holders will allow access to various DeFi applications, whether that’s lending, borrowing or for use in automated market makers, CEO of Tokensoft Mason Borda said. Wrapped has previously wrapped a number of tokens, including bitcoin, zcash, filecoin and others.