Is Etherium Price About To Overtake Bitcoin? Here's What To Consider Before Buying

For years, Bitcoin has reigned supreme in the world of cryptocurrency, often referred to as the undisputed digital gold. However, a rising challenger, Ethereum, is increasingly making headlines, with many wondering if its price could soon surpass that of Bitcoin's.

Ethereum, the most prominent alternative cryptocurrency, has seen a considerable 23% increase in value since the beginning of this month. This upward movement has been significantly supported by Bitcoin's strong performance, alongside consistent demand from exchange-traded funds (ETFs), notable accumulation by large holders, and various other contributing factors.

The reasons behind Ethereum's recent price surge are apparent, and analysts are now closely monitoring whether it can maintain this upward trajectory through to the end of the year. Here are five significant factors that The Coin Republic suggests are worth observing amidst ETH's price breakout and the anticipated 'altseason.'

Institutional Interest in Ethereum is on the Rise

During July, large-scale investors and organisations significantly increased their holdings of Ethereum. For instance, a notable 'whale' wallet, identified as '0x35fa', recently withdrew 32,566 ETH, valued at approximately $89.3 million (£66.47 million), from the Kraken exchange, with an average acquisition cost of $2,741 (£2040.37) per ETH.

Investment firm Abraxas Capital also moved 29,741 ETH, approximately $81 million, from Binance and Kraken, with an average purchase price of $2,725 (£2028.46). Meanwhile, SharpLink Gaming has continued to expand its exposure, acquiring 6,377 ETH on July 16, an amount worth $19.56 million (£14.56 million).

The company's total holdings now stand at 287,083 ETH, with an estimated value of $908 million. Additionally, another significant holder, identified as '0x8C08', acquired 9,188 ETH for roughly $25 million (£18.61 million), and also added 8,243 AAVE tokens, valued at $2.5 million (£1.86 million).

Watch for Warning Signs as Market Appears Overheated

There are indications that Ethereum's upward trend could soon lose momentum. Market indicators suggest the asset is approaching overbought conditions. Specifically, the Relative Strength Index (RSI) is at 82.01, a level that often indicates potential overbought conditions and a subsequent market correction.

Traders were also expecting some profit-taking in the wake of a rapid price increase. If prices fall below $2,900, support would likely emerge within the $2,700 (£2,009.85) to $2,800 (£2,084.29) range. A more significant decline could be in the offing if the broader market sentiment shifts negatively or if new regulations impact investor confidence.

Binance's Expanding Ethereum Holdings

By the end of July, Binance's Ethereum reserves neared 5 million ETH, according to data from CryptoQuant. This marks a significant increase from 3.8 million earlier in the year, indicating the exchange's growing capacity to meet higher demand.

This significant rise can be attributed to an increase in users transferring their assets to Binance, drawn by its enhanced liquidity. However, such substantial holdings have raised some concerns, with analysts cautioning about potential risks if Binance were to face a significant bank run or security breach.

Despite these apprehensions, there have been no signs of significant selling activity from the exchange, which contributes to a relatively stable market outlook for Ethereum.

Crypto Stocks Ride the Wave

While Ethereum captures significant attention with its recent gains, the broader cryptocurrency market is also witnessing monumental shifts, with Bitcoin leading the charge as its price soared to a record high of $118,705 (£88362.81) just days before a pivotal 'Crypto Week' in the US Congress.

This strong bullish momentum didn't just boost Bitcoin; it also significantly pushed up the prices of other well-known cryptocurrencies such as Dogecoin, XRP, and Ether. Moreover, shares in crypto trading platforms like Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN) also saw notable gains, reflecting the broader market's positive sentiment.