In a recent turn of events, Ethereum (ETH) has once again broken through the $4,000 barrier on February 22, signaling a potential extension of its lead over Bitcoin (BTC). Despite the ongoing struggles for momentum in Bitcoin’s price rally, three vital market metrics suggest that ETH could continue to outperform BTC in the coming weeks.
Historically closely correlated, Ethereum seems to have gained the upper hand in 2024, showcasing a 7% year-to-date performance lead over Bitcoin. As of March 2024, Bitcoin is trading at historic all-time highs of $71,200, while Ethereum aims to establish a firm support level above the $4,000 milestone.
A deeper analysis of on-chain data trends and expert opinions provides insights into which asset is poised to dominate as the year unfolds.
Is Ethereum a Better Bet in 2024?
While both Ethereum and Bitcoin have attracted billions of dollars in capital inflows in 2024, Ethereum currently holds the upper hand, outperforming Bitcoin by 7% in terms of year-to-date performance. The chart reveals that ETH prices have increased by 79% between January 1 and March 11, 2024, surpassing Bitcoin’s 72% price gains.
To evaluate the value for money, it is crucial to examine the market catalysts driving both assets. Ethereum’s themes include ongoing ETH ETF filings, liquidity staking derivatives, Eigen-layer re-staking, and the Dencun upgrade. In contrast, Bitcoin’s dominant themes revolve around the rapidly growing demand from 10 newly-approved BTC ETFs and the upcoming halving event on April 19, 2024.
3 Reasons Ethereum Could Outperform Bitcoin
Retail Investors Flock to ETH: The approval of 10 new Bitcoin ETFs by the SEC triggered a significant milestone for the crypto sector. However, the dominance of these ETFs has led to a skittish reaction among BTC retail investors. Santiment’s total holders metric indicates a surge in new holder addresses on the Ethereum network, while BTC addresses witness a decline. This divergence suggests a growing preference for Ethereum among retail investors, possibly due to its promise of profit optimization and passive income.
Bitcoin Miners Sell-off: As Bitcoin miners enter a selling frenzy ahead of the April 19 halving event, Ethereum node validators continue to accumulate coins. The significant difference in trading dispositions between Bitcoin miners and Ethereum validators could potentially slow down the BTC price rally.
Technical Indicators Support ETH’s Surge: Ethereum is expected to experience greater retail market demand than Bitcoin, coupled with a temporary decline in circulation supply due to rising staking deposits. Technical indicators highlight a clear path for ETH to reach new all-time highs above $5,000, with the $4,500 range identified as a crucial resistance cluster.
As of March 11, ETH is trading above $4,030, and with these key factors still in play, it is poised to extend its lead over BTC in the coming weeks.
