Ethereum Trading Volume Approaching Bitcoin… Will Ethereum Lead the Next Bull Run?
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Answer Ethereum Trading Volume Approaching Bitcoin… Will Ethereum Lead the Next Bull Run?
Recent data has shown that trading volumes for Ethereum are converging with those of its larger counterpart, Bitcoin.
Ethereum, the world’s second largest cryptocurrency, has seen a spike in interest this year ahead of a widely expected shift to a Proof of Stake (PoS) model.
The price of Ethereum is up more than 20% in the past two weeks, and has been trading at around $3,400 near this year’s break-even point.
Daily trading volumes have also been rising steadily, averaging around $20 billion over the past week.
The price of Bitcoin also climbed to its highest levels in 2022 this week, and is trading around $47,000.Read:Luna Corporation Sells $1.5 Billion of Bitcoin (Bought for $47,000 and Sold for $33,000)
But while volumes increased, they were well below the massive amounts of liquidity seen in 2021.
The world’s largest cryptocurrency accounted for more than 40% of the total cryptocurrency market capitalization.
But the recent rally in the cryptocurrency has also seen many digital currencies outperform Bitcoin.
A similar scenario was observed during the beginning of March 2021, which eventually challenged the dominance of Bitcoin.
Ethereum and Bitcoin trading volumes converge:
Data from research firm Kaiko shows that the convergence of the volumes of Ethereum and Bitcoin has been increasing since 2021.
—Kaiko (KaikoData) March 30, 2022
At certain points over the past year, the volumes of the seven-day moving average of the two currencies have been at exactly the same levels.
The data could point to a broader shift in market structure, as bitcoin volumes dwindle further and market liquidity flows into many other projects.Read:Why is Bitcoin trading at $5,500 on Bitfinex and $5,200 on other platforms?
This phenomenon is called “Altcoin season”.
While Bitcoin’s market dominance has so far remained unchallenged, its diminishing volumes could shake this status quo.Read:Could Bitcoin Price Reach $60,000 in 2018?
The crypto market boom of 2021 eroded Bitcoin’s market weight, bringing it down to 42% today, from a whopping 71% takeover seen at the end of 2020.
So is it altcoin season?
Cryptocurrencies including (ADA), (XRP), (LUNA) and (SOL) have overtaken bitcoin in the past two weeks, in terms of price performance.
Additional gains in their market capitalization could threaten Bitcoin’s dominance and make it dwindle.
Currently, the top 10 altcoins have a combined total market value of around $700 billion, compared to $897 billion for Bitcoin.
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