Key Findings:
- Ether (ETH) price is up almost 70% since the mid-June lows.
- A recent report suggested that Ethereum could attract broad institutional interest from investors in the future.
- Data shows that Ethereum has outperformed on multiple adoption metrics over the past few months.
The attention of the larger cryptocurrency market has shifted to top altcoin Ethereum for quite some time. It’s not just the much-anticipated upcoming merger or recent price spike that ETH has seen.
Notably, ether price is up almost 70% since the mid-June lows. Additionally, the top altcoin by market cap has outperformed the leading cryptocurrency Bitcoin (BTC) by almost 40% over this span.
“Booms, Busts, and Bitcoin,” a recent Bloomberg Intelligence report, suggested that Ethereum (ETH) could attract broad institutional interest from investors in the future.
So, after ETH price has outperformed BTC for the past few months, can Ethereum emerge from the bear market and shine and become a “global institutional asset”?
Can Ethereum be the king?
The cryptocurrency market has had a king coin since its inception, with Bitcoin leading the race as the top cryptocurrency by market cap. Ethereum has carved a niche for itself not only as an altcoin or cryptocurrency, but also as a technology in recent years.
After ETH price gains surpassed BTC over the past month, speculation as to whether Ethereum could continue to outperform Bitcoin began to resurface. However, as the larger market appears to be recovering from the macro-bearish trend, the more crucial question is whether The Merge could keep ETH’s price going or whether the price will need other catalysts along the way.
Interestingly, the report published on August 3 presented that The Merge, scheduled for September 2022, could act as a possible catalyst turning Ethereum into “a global institutional asset.”
The data further showed that Ethereum outperformed on multiple adoption metrics such as active users, addresses with non-zero balances, and transactions “in absolute terms to the last bear market and relative to Bitcoin.” The same meant that ETH not only performed better than it did during the last bear market, but also outperformed BTC on the metrics mentioned above.
Ethereum Basics Dashboard | Source: Bloomberg Crypto Outlook
ETH adoption metrics hold solid
Bloomberg data further showed that non-zero ETH addresses were at an all-time high (3-year 100% percentile) – nearly double the Bitcoin network’s level in August 2022. Active ETH addresses were also flat year-on-year , noting an increase of 5%.
Ethereum’s active addresses were 113% higher than three years ago, outperforming Bitcoin, which was down 30% over the same period. Additionally, the number of transactions has remained stable year-on-year, with transfer volume down just 7% despite a 29% price drop.
One of the most pressing issues surrounding the Ethereum network – its network fee – also came as a relief as price action increased. Data from Kaiko’s research showed that on Aug. 4, the network saw the lowest average transaction fees of $3. The current levels were also the lowest transaction fees the network has seen since December 2020.
Ethereum Transaction Fees | Source: Kaiko Research
This decrease in transaction fees is a relief for the Ethereum network and its users, as the community has often criticized the high transaction fee in the past. With lower fees and glimmering adoption metrics, analysts believe it could also drive adoption in the decentralized finance (DeFi) and non-fungible tokens (NFT) space.
Short-term fate still shaky
Despite ETH’s price gaining nearly 64% from the June 2022 lows, at press time, ETH’s price is still 67.03% off its all-time high. At the time of writing, ETH was trading at $1,598.45 after the coin faced significant resistance from bears at the $1600 support/resistance line.
ETH daily price chart | Source: FXEmpire
Looking at the daily chart of ETH suggests that the next immediate resistance stands at the $1,600 and $1,750 levels. As BTC sees a short-term price decline, ETH’s price lacks the primary strength to scale above crucial resistance levels due to the current market structure.
Nonetheless, with the upcoming merger marking the network’s transition to a Proof-of-Stake (PoS), analysts expect a solid recovery in the Ethereum ecosystem and ETH price.
However, the short-term and medium-term metrics still raise doubts as to whether this recent rise in price was just a bear market rally or whether the fundamentals are strong enough to drive the market.
That said, while ETH’s long-term performance looks assured, speculating whether ETH would outperform Bitcoin could be a far-fetched thought. Additionally, Bitcoin’s market dominance, monopoly, and first-mover advantage could continue to give the king coin an advantage in the short and medium term.
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