The Ethereum (ETH) price rally comes amid strong on-chain fundamentals and depleting exchange reserves. The London hard fork has also fueled the bull run.
The world’s second-largest cryptocurrency Ethereum (ETH) is on an unstoppable bull run. Over the last 24 hours, the Ethereum price has gained another 8% shooting past $3,800 levels. This is for the first time in the last three months that the ETH price has moved past $3,500.
Ethereum (ETH) has added 50% to its price over the last month to reach this milestone. Another 20% rally in the ETH price can put it into a price discovery zone and a new all-time high. The latest price rally in ETH comes amid the solid bull run in the altcoin space.
Although Bitcoin (BTC) had been consolidating in the range between $47,000-$50,000, ETH has continued its staggering bull run. On the other hand, the recent ETH price run comes amid improving on-chain metrics.
Over the last few months, the ETH reserves across all exchanges have been on a continuous decline. As per the blockchain analytics firm, the amount of ETH held in exchange wallets has dropped from 19.45 million on Aug. 18 to 18.75 million on Wednesday, September 1.
The falling exchange reserves are a bullish indicator since analysts expect investors to move their ETH to cold wallets. Meaning, they are likely to hold it for the long term decreasing the selling pressure.
On the other hand, a large number of ETH have been moving to Ethereum 2.0 smart contracts. These smart contracts are currently holding nearly 7 million ETH coins worth a staggering $25 billion.
Also, the recent London hardfork upgrade of the Ethereum blockchain has fueled the rally in the ETH price. The EIP-1559 protocol implementation also introduced the ETH burning mechanism.
Will Ethereum (ETH) Overtake Bitcoin?
Ethereum (ETH) has certainly outperformed Bitcoin (BTC) over the last year. While the Ethereum (ETH) price has gained 10x over the last year, Bitcoin is up by 5x on the yearly chart. Clearly, Ethereum outperforms Bitcoin by 2:1.
Besides, many analysts have now started thinking that Ethereum will overtake Bitcoin in the long run. If ETH continues to beat BTC gains at the current rate, it certainly can. However, ETH valuations are less than 50% of the Bitcoin valuations as of date.
Dmitry Mishunin, founder and CEO of smart contract audit firm HashEx, predicts that ETH could quite easily flip BTC in the near term. He added:
“Bitcoin only relies on its capped supply and the first-mover advantage, a trend many investors are beginning to substitute for unique technology that can drive a blockchain-dominated future.”
Jon Ovadia, founder and CEO of crypto exchange Ovex also believes that Ethereum has better fundamentals than Bitcoin. Ovadia is bullish about the recent Ethereum network upgrade which makes the blockchain deflationary. He added:
“Thus far, about 146,878.7 ETH (worth approximately $492.3 million) have been burnt from the total circulating supply. The potential for a more superior Proof-of-Stake infrastructure through the highly anticipated launch of Ethereum 2.0 will also make the blockchain more usable, thus driving the coin’s utility and its price growth.”
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