The king of altcoins has been closely associated with Bitcoin since time immemorial. Needless to say, every move of King Coin had a certain impact on Ethereum. However, this dynamic is starting to change, which could have good ramifications for second-generation cryptocurrencies and their investors.
Ethereum surpasses Bitcoin
The cryptocurrency market has fluctuated between bullish and bearish over the past few weeks. Despite the macro time frame, Ethereum has rallied sharply, recovering all of its losses in June.
Given the improving market conditions, ETH has also improved its status, trading at $1,721 at press time. The altcoin is nearing a critical zone after a recent 8.1% gain. This will prepare Ethereum for a rally until the September 19th merger arrives.
Ethereum price action | Source: TradingView – AMBCrypto
The Fibonacci retracement from the all-time high of $4,811 to the low of $880 has brought Ethereum into key areas, and the altcoin is close to one of them. The 23.6% Fibonacci level, as a solid base/support for any bounce, comes at the right time. In fact, at the $1,807 price level, ETH appears to be very close to breaking out and turning into support.
The reasons behind this rise are two-fold. The first is the lack of investor activity as ETH holders have been holding it for over a month. Tokens changing hands have been falling, which is good because trading in such a volatile environment will inevitably lead to losses.
Ethereum speed | Resources: Santiment – AMBCrypto
Since that didn’t happen, ETH managed to recover on the charts. The same evidence can also be found in the network’s gas fees.
Lack of circulation led to lower costs last week, and costs are expected to rise once the combined FOMO begins.
Ethereum Notices Fee Drop | Resources: Santiment – AMBCrypto
The second reason is the merger itself, which is bound to bring a structural shift to the second largest crypto network. As the update date gets closer, so does the hype, which is why Ethereum is growing faster than Bitcoin.
At ETH’s press-time price last year, BTC was worth $41,000. Today, it is struggling to break above $24,000. So if ETH does decouple from BTC, it will be in a better position.
