Liquidity crisis on Ethereum intensifies: Will ETH rise to a new all-time high before Bitcoin?

August 26, 2021


Liquidity crisis on Ethereum intensifies

Ethereum could rise to a new all-time high even before Bitcoin - and in the long term potentially even become as big as IT giant Microsoft. This assessment is currently shared by two renowned analysts.

Demand for Ethereum is rising - supply is falling

Ethereum was also hit by the recent market downturn: the number 2 cryptocurrency by market capitalisation suffered a 5% price loss within the last 24 hours. This means that after the recent highs of around 3,300 dollars, ETH is now trading at just over 3,000 dollars again.

Ethereum is rising -

But: Apart from the short-term pain, Ethereum could be well positioned to reach a new all-time high even before Bitcoin. Popular on-chain analyst Ki Young Ju, for example, assumes this. The CEO of blockchain data provider Cryptoquant.com cites the following as his reasoning:

1. the current Ethereum price is closer to the previous all-time high than Bitcoin.
2. increased demand, lower supply. According to Ki Young Ju, the liquidity crisis on the sell side of Ethereum continues to worsen, while BTC exchange reserves would have ended their downward trend in May. Ethereum holdings on the exchanges have thus fallen to a new two-year low.

$ETH might reach its all-time high earlier than $BTC in the long term. 1/ Current $ETH price is closer to ATH compared to $BTC. 2/ Higher demand, lower supply. $ETH sell-side liquidity crisis still intensifies, while $BTC exchange reserve stopped its downward trend in May. 

Jus conclusion: Technically, Ethereum could see some corrections - but only in the short term.

"I THINK ETH COULD OUTPERFORM BTC IF BITCOIN PRICE GOES SIDEWAYS OR BULLISH."

Will Ethereum become as big as Microsoft?

Guy, the pseudonymous moderator of the YouTube channel "Coin Bureau", is also extremely bullish on Ethereum in the medium term. In a new analysis, he even ventures the thesis of whether Ethereum will one day become as big as software giant Microsoft. Ethereum would have achieved this at a price of 17,000 dollars, because then the coin would have a market capitalisation the size of Microsoft. According to Guy's assessment, ETH has the potential to do so.

The reasons: among others, the EIP-1559 upgrade that keeps burning ETH, the coming switch to ETH 2.0 and the endorsement by big institutions like JP Morgan Chase.

It's hard, Guy said, to look at all these fundamental factors and not be incredibly optimistic about Ethereum's future. With the move to ETH 2.0, he said, ETH will become "ultra-solid money that goes down year by year, day by day, block by block."

And:

"OF COURSE, IT'S NOT JUST US WHO ARE TRYING TO GRAB THIS ULTRA-SOLID MONEY. THE INSTITUTIONS ARE ALSO SCRAMBLING FOR ETH, AS THEY WANT TO ACCUMULATE MORE AND MORE OF IT. I DON'T THINK THIS THEME WILL ABATE ANY TIME SOON.

The analyst is bullish, saying that market momentum is on our side - "and the ETH bulls are not running out of steam".

Ethereum is the best secure block chain based secure crypto currency platform. I helps to develop secure transparent crypto currency solutions for our customers.

About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}