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Ethereum (ETH) is gaining importance as Bitcoin maintains its recent highs. Despite the fact that it is Ethereum Currently 36% below its all-time high of $4,878 as of 2021, analysts predict that the second-largest cryptocurrency by market cap may be poised for a major shift.
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The Ethereum ecosystem is a hive of activity, with an increase in institutional investments, rising interest in ETFs, and increasing transaction volumes.
From 1.1 million recorded three months ago, the daily transaction volume on Ethereum has risen to 1.22 million, a significant rise according to the latest statistics from IntoTheBlock.
Bitcoin has been the star of this rally, but what about Ethereum?
Historically, Ethereum was one of the first assets to benefit from a profit rotation after Bitcoin’s move.
Currently, Ethereum’s on-chain activity is showing evenly spaced potential resistance levels, but in… pic.twitter.com/amkbZmtEyo
— IntoTheBlock (@intotheblock) November 21, 2024
Although the increase is not significant, it indicates that network usage is stable. This consistent activity serves as the foundation for Ethereum’s long-term value and underscores its continued importance in the cryptocurrency sector.
Institutional investors are placing bets
Last week, institutional buyers bought more than $1.4 billion worth of Ethereum (ETH), causing a stir in the cryptocurrency community. During the same time frame, $147 million was placed in Spot Ethereum ETFs. This shows that people are becoming more optimistic about the future of ETH.
#Ethereum Whales bought more than 430,000 $ Ethereum In the past two weeks, a value of more than $1.40 billion! pic.twitter.com/n7iTTADuax
– Ali (@ali_charts) November 14, 2024
Activity continues to rise. Trading volumes for Ethereum ETFs reached a record high of $1.63 billion last week, representing a 44% weekly increase.
According to analysts, this increase is consistent with patterns observed in Bitcoin ETFs, which experienced an initial period of stagnation, followed by a period of sustained growth.
In response, the price of Ethereum rose to record highs, rising 25%, the largest weekly gain in six months. Many people see these changes as signs that Ethereum is gaining speed, which could lead to further benefits.
Changing Landscapes: Second-Layer Solutions
Although there are positives, the growth in the Ethereum network sends a mixed signal. New ETH addresses generated are lower than those seen in previous bull markets.
Experts believe that this is due to second-layer options such as Base. Since these technologies are built on the Ethereum infrastructure, transfers can occur more quickly and with less money. This makes a direct connection to the Ethereum main chain less important.
However, the importance of Ethereum has not been overshadowed Layer 2 growth. Tokens remain indispensable in decentralized finance (DeFi) and NFT ecosystems. In fact, this expansion strengthens the core functionality of Ethereum while simultaneously increasing scalability and accessibility.
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ETH is becoming less correlated with BTC.
The 180-day BTC-ETH Pearson correlation has hit a three-year low. 10% rise in #Bitcoin It can result in only 3% profit #Ethereum.
Just because BTC is strong doesn’t mean you should buy ETH. Each asset now follows its own path. pic.twitter.com/4Dn4QoInXo
– Ki Young Ju (@ki_young_ju) November 19, 2024
Ethereum is separated from Bitcoin
Ethereum’s independence from Bitcoin is becoming increasingly clear. The 180-day correlation between the two cryptocurrencies fell to a three-year low, falling below 0.5. This change, according to analysts, indicates that Ethereum is now more affected by distinct market dynamics than Bitcoin price fluctuations.
The necessity for an independent assessment of ether’s potential is increasing as it continues to pursue its own path. Ethereum is proving to be more than just a counterpart to Bitcoin – it is making its own way in the world of cryptocurrencies, whether through the adoption of layer 2 solutions, institutional interest, or increased ETF activity.
Featured image from DALL-E, chart from TradingView