5 Reasons Why Ethereum Might Outshine Bitcoin Soon

5 Reasons Why Ethereum Might Outshine Bitcoin Soon
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Key Insights

  • Ethereum's price gains have lagged behind Bitcoin's in 2023, but key metrics suggest a change.
  • Long-term holders are accumulating Ethereum at a higher rate than Bitcoin, indicating strong investor confidence.
  • The upcoming EIP-4844 upgrade is expected to drastically reduce ETH transaction fees and attract more developers and applications.
  • Analysts like Raoul Pal and SwallowPremium predict a bullish breakout for ETH in 2024, potentially reaching $3,500 or higher.
  • Ethereum's current consolidation phase could be the "calm before the storm".

To put things simply, ETH's price action has been relatively slow so far, compared to Bitcoin.

2023 has almost ended, and ETH is only up by about 83% on a YTD basis. This is impressive enough but is completely dwarfed by Bitcoin's 152% yearly increase, per data from Coingecko.

However, what if there were glaring signs that things are about to change?

Let's go over a few of these:

Ethereum's Key Metrics Are Going Up

According to a recent tweet from blockchain analytics firm IntoTheBlock, the percentage of ETH held by long-term holders has reached 70% since 1 December this year.

While Bitcoin beats Ethereum in terms of YTD price gains, ETH's percentage of long-term holders also slightly beats that of Bitcoin, which sits at 69.8%.

ETH's LTH spikes | Source: <a href='https://twitter.com/intotheblock/status/1738801805780246948/' target='_blank' rel='noreferrer noopener'><u>IntoTheBlock/Twitter</u></a>
ETH's LTH spikes | Source: IntoTheBlock/Twitter

In essence, IntoTheBlock's tweet shows that ETH investors believe just as much in Ethereum, as Bitcoin's investors do in Bitcoin.

Ethereum's Bright Future

This optimism for ETH was echoed in a tweet from renowned crypto analyst and co-founder of Real Vision, Raoul Pal in a 23 December tweet.

Ethereum will beat Bitcoin in 2024
Ethereum will beat Bitcoin in 2024

According to Pal, Bitcoin rallied long before ETH back in 2021, when Bitcoin was at $44,000 and ETH was at $1,400.

Pal says that right after this happened, Bitcoin simply flipped, and rallied by 245%, compared to Ethereum's 45% in 9 months.

Based on this historical data, Pal implies that ETH and BTC behave similarly in certain market conditions, where ETH is slightly sluggish and Bitcoin takes the lead.

Soon after this, ETH then takes over and beats Bitcoin by a very wide margin.

Pal expects this trend to happen again and states that ETH outperforming BTC will be a key macro trend in 2024.

EIP-4844 Upgrade Set To Create Bullish Momentum

The Ethereum network is set to undergo a new upgrade called the Dencun upgrade, or the EIP 4844 upgrade.

According to reports, this upgrade will implement a protocol called proto-dank sharding to improve the speed of ETH, by processing transactions off-chain and then settling them on the main chain.

In essence, the fees for sending money on the ETH network are set to decline drastically, with analysts even predicting as much as a 90% decrease in fees on the network.

This means that more Dapp developers will start to flock towards Ethereum, which can now handle more transactions and support more applications.

Overall, metrics like Defi TVL and even the cryptocurrency's price are set to explode to the upside.

Core Ethereum developers have announced that this upgrade will go live on the Goerli testnet around mid-January 2024, on Sepolia by late January, and on the ETH mainnet around late February to mid-March next year.

Ethereum To $3,500?

According to a recent tweet from SwallowPremium, after ETH first broke out from the $2,150 resistance, the cryptocurrency had a "clean retest", and may be headed for a bullish price reversal, sooner or later.

SwalowPremium notes that as the year comes to a close, Ethereum may be inside a "calm before the storm" phase, where the price merely consolidates, while teasing the bulls and bears.

SwallowPremium says that if Ethereum breaks clean above the $2,500 resistance, we may be looking at a sustained rally, straight up to $3,500.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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