Bitcoin surged to a new all-time high of $97,862.64 early Thursday, continuing its bullish run, while Ethereum (ETH) lagged behind, with its performance against Bitcoin hitting the lowest level of the year. As BTC consolidates around $97,379.69, the growing gap between the two largest cryptocurrencies has raised questions about Ethereum’s ability to regain momentum and whether Bitcoin’s rally could lead to a broader pullback in the altcoin market.
Bitcoin’s Market Dominance Rises
Bitcoin’s dominance in the crypto market has surged to 60.5%, a significant increase of over 3% in just the past month, according to data from CoinMarketCap. This rise in dominance comes as Bitcoin hits a new peak, driven in large part by institutional investment.
Edul Patel, CEO of Mudrex, explained in an interview with IndiaToday that the influx of institutional capital, combined with the political landscape, particularly the election of pro-crypto president-elect Donald Trump, has bolstered Bitcoin’s appeal. Trump, who has shown increasing support for cryptocurrencies, is seen as a key factor in the recent surge, with figures like Elon Musk also contributing to the crypto-positive sentiment.
Ethereum, by contrast, has seen its dominance drop to 11.8%, down from 13.8% last month. The ETH/BTC pair, now at its lowest point of the year, reflects Ethereum’s struggle to keep pace with Bitcoin’s remarkable rally. While ETH’s price has fluctuated, it has not matched Bitcoin’s strong upward momentum.
ETH Struggles with Technical Indicators
Technical indicators further highlight Ethereum’s challenges. The Moving Average Convergence Divergence (MACD) for ETH shows ongoing momentum struggles, particularly near critical resistance levels. Additionally, the Altcoin Season Index, which currently sits at 28, suggests that the broader market is favoring Bitcoin over altcoins like Ethereum. This shift in liquidity, with capital flowing away from altcoins and into Bitcoin, underscores the widening gap in performance.
Can Ethereum Regain Momentum?
The potential for Ethereum to recover depends on both fundamental and technical factors. On the fundamental side, Ethereum continues to see strong development, including advancements in Layer-2 scaling solutions, the growing decentralized finance (DeFi) ecosystem, and active staking on Ethereum 2.0. However, technical analysis suggests that ETH faces key support at 0.057 BTC, which may serve as a base for a potential rebound. Resistance levels are seen at 0.065 BTC and 0.070 BTC, marking critical thresholds that Ethereum must break through to regain momentum against Bitcoin.
To close the widening gap, Ethereum will need to break above these resistance levels and demonstrate sustained growth through its ongoing network upgrades. Success in these areas could help the ETH/BTC pair recover and restore Ethereum’s competitive standing in the market.
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