Recently, ether (ETH), the native crypto of Ethereum, has experienced notable dynamism. The asset is currently hovering around the $3,000 mark. Enough to raise hope among crypto-enthusiasts regarding the continuation of this trend with a positive effect on altcoins. A question that visibly divides analysts and experts.
Hope for an altcoin season driven by Ethereum’s ether (ETH)
The recent surge in the price of ether (ETH), which approached the $3,000 mark, has raised hopes of an imminent “altseason” within the crypto community. However, analysts remain divided on the issue. On February 19, the Ethereum-native crypto hit an intraday high of $2,980. This is its highest level in 22 months. Many enthusiasts believe that this could herald the start of an ETH bull market and, therefore, of an altcoin rally.
Henrik Andersson, chief investment officer at Apollo Capital, highlighted several fundamental factors that support this sentiment. These include upcoming Ethereum updates and mainnet launches for scaling solutions.
Additionally, Ethereum’s relative underperformance versus Bitcoin over the past year suggests a potential catch-up. Particularly given its deflationary nature following the transition to Proof of Stake (PoS).
Yuga Cohler, senior director of engineering at Coinbase, echoed similar sentiments. In particular, he highlights the correlation between a bull market in ETH and positive results for altcoins. Meanwhile, voices like that of Mikybull Crypto are predicting a bullish March for the native blockchain asset Ethereum, with $3,000 as a plausible target. He anticipates a significant increase in altcoin activity.
Dissenting voices regarding this perspective
However, Markus Thielen, director of 10x Research, has an opposing view. According to him, there is a lack of substantial evidence regarding the possibility of an imminent altcoin season. He highlights that sustainable reductions in bitcoin (BTC) dominance below 45% are necessary to foster a viable altcoin rally.
The crypto expert also notes that unlike previous increases seen during the summer ICO and DeFi bull markets, the current rise has no clear explanation. Excluding the influx of investments in spot Bitcoin ETFs. Additionally, recent altcoin rallies have quickly dissipated. Which suggests higher risk-adjusted potential for BTC investments.
Markus Thielen’s analysis also questions the sustainability of Ethereum’s momentum. He believes he may be more motivated by the anticipation of ETF approval in May than by the increase in on-chain activity within decentralized applications (dApps). For the analyst, the current bull market will persist until 2025. A period during which altcoins could experience sporadic recoveries.
Supporting Markus Thielen’s cautious outlook, blockchain analytics firm Santiment warns of overbought signals in the market. As indicated by the metric of market value relative to realized value (MVRV). It suggests above-average risk associated with purchasing or opening new positions during the current surge. This, while most crypto projects have generated profits in the medium and long term, since October 2023.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
