Ethereum, despite what you may think, did not see a positive 2019. The second-largest cryptocurrency by market capitalization registered a slightly negative performance in 2019, which was starkly contrasted by Bitcoin’s yearly gain of over 90%.
This meant that the market for ETH/BTC fell off a cliff, with the price of one Ether falling as low as 0.016 BTC — the lowest the pair had been in years and around 90% below the all-time high well above 0.1 BTC.
Though, over the past few weeks, Ethereum has shot higher against the U.S. dollar and against BTC, buoyed by the sentiment that there is an impending altseason and the simple fact the asset was oversold in 2019.
Ethereum Could Soon Go Vertical
According to a recent analysis by prominent cryptocurrency market commentator Loma (LomahCrypto), ETH/BTC could be on the verge of going near-vertical.
The trader posted the below chart to back his point, showing that the trading pair has begun to consolidate above the key horizontal support around 0.026 Bitcoin; in fact, the pair has remained above this key inflection point for around 10 days now, boding well for the bullish narrative.
This consolidation, Loma depicted, is a likely sign ETH will rally 15% against Bitcoin in a near-vertical fashion in the coming weeks, boding well for those with heavier allocations to Ethereum than Bitcoin.
Ethereum’s 2.0 Could Add to Bullish Narrative
There are fundamental reasons to believe Ethereum could outperform the tried-and-true market leader from here.
Namely, the proximity of the blockchain’s 2.0 (or Serenity) upgrade, which will fundamentally change how Ethereum works in a way that many say will be the for the better.
Boring details aside, Ethereum 2.0 will see the amount of ETH issued per block be cut dramatically, meaning that the relatively-high inflation rate of the asset (compared to BTC post-halving, fiat, etc.) will be dropped dramatically.
The decreased selling pressure from miners, coupled with the adoption enabled by the technical improvements included in Serenity, should help push Ethereum higher in the long run.
DeFi Under Fire
While there is the growth of DeFi and Ethereum 2.0 going for bulls, there are some concerns around on-chain finance, potentially acting as a bearish case for the ETH/BTC pair moving forward.
For those who missed the memo, the past few days has seen controversy erupt regarding bZx, a DeFi platform that has suffered two “attacks” or “exploits”. The two attacks weren’t exactly the same, but the gist of both of them are as follows:
- A user took out a “flash loan” of a large sum of ETH from bZx. A flash loan is where a user borrows and returns the loaned capital in the same transaction.
- The ETH was used to purchase another Ethereum-based asset.
- The user deployed manipulation to change how other protocols see the price of said Ethereum-based asset, allowing for profits to be made due to data oracles registering the false market prices as accurate.
The attacks saw certain DeFi protocols lose $300,000 and around $650,000, respectively, for a total of nearly $1 million.
While some have argued that this manipulation is more of a feature than a bug, commentators across the cryptocurrency field have said that these debacles in DeFi prove that Ethereum’s killer use case is not killer just yet, potentially hampering adoption.
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