As it is known, Etherum has many fundamental catalysts that could increase its value in the short term. Significantly, Eth2 has some positive factors. The decentralized finance market’s strength and high decentralized exchange usage. However, against the Bitcoin on the Ethereum chart, it is exhibiting indications of a short-term struggle.
Significantly, some high-net-worth investors in the crypto market prefer to denominate their holdings in the world’s largest cryptocurrency, Bitcoin.
These investors gauge their portfolio’s performance in Bitcoin terms and not by the U.S. dollar’s value.
Ethereum stays highly compelling in the medium term because of those fundamental factors. However, against Bitcoin, technicals explain it is still stagnating under a key short-term trendline.
The demand for Ethereum among whales could start to accelerate when Ethereum breaks out versus Bitcoin. It would make ETH a fair play for high-net-worth investors looking to increase their Bitcoin-denominated portfolio.
However, until the breakout occurs on the ETH/BTC pair, an argument is made. The Ethereum price could stagnate versus Bitcoin.
Another variable is the Bitcoin price floating beneath $20,000, at about $19,400. If Bitcoin hits past $20,000, it will enter price discovery.
Significantly, the term price discovery refers to when an asset exceeds its prior peak and rises to a new ceiling. Since there is no historical data to imply where Bitcoin might go after $20,000, newfound momentum could emerge.
When the dominant cryptocurrency marks a large upside price movement, altcoins typically lag. Additionally, alternative cryptocurrencies perform great when Bitcoin is consolidating. Hence, investors are exploring higher-risk plays.
In the short-term, if BTC increases over $20,000, this could place some pressure on other significant cryptocurrencies.
Still, the ETH/BTC pair’s consolidation does not make Ethereum less optimistic in the medium term.
ETH ecosystem has seen exponential growth
During 2020, the Ethereum ecosystem has witnessed exponential growth across many areas.
Decentralized exchanges such as Coinbase overtook top cryptocurrency markets throughout periods with high volume. Significantly, the total value locked across Defi protocols hit $15 billion and is now comfortably hovering over $14 billion.
Significantly, Eth2 was accepted after the above 400,000 ETH were deposited to the Eth2 deposit contract address. Eth2 is a significant network upgrade that scales the Ethereum blockchain.
Before Eth2, the Ethereum blockchain was able to process fewer than 20 transactions per second. Post Eth2, Ethereum will process thousands of transactions per second. It would only rise with other technologies, including Sharding.
According to a former Stripe developer and a Defi engineer, Ric Burton, the ERC 20 standard, Automated Market Makers, and yield farming have unlocked ample investors and engineers’ opportunities. All three have witnessed enormous growth in 2020, making 2021 a crucial year for Ethereum.