Bitcoin and Ether may be doing a comeback – but at each other’s expense.
According to the most recent data reports, the return to all-time highs for Bitcoin and Ether is a dog-eat-dog situation. Furthermore, recent analysis research also shows how Ethereum’s native currency, Ether (ETH), may even surpass Bitcoin (BTC) to new peak heights.
Ki Young Ju, CEO of the on-chain analytics firm CryptoQuant, emphasized a “liquidity crisis on sell-side” in his tweet on Wednesday. It has only given the ETH a compelling advantage over BTC.
The intensifying crisis of Ether liquidity
With Bitcoin’s inconsistencies garnering up more than 50% from its lows of $29,000, the altcoins, like Ether, have started to be revived.
In fact, the most prominent cryptocurrency has reclaimed $3,000, a level that is currently being retested as support just this week. However, despite the emphasis on Bitcoin recovering $50,000, the Ether has remained optimistic after its triumph on its hard fork deployment in London that happened earlier this month.
Due to the supply adjustments forced by the stated hard fork, a liquidity shortage may eventually help to allow ETH/USD to reach new record highs before BTC/USD does the same.
Ki provided support to this analysis as he concluded that “in the long run, $ETH may hit its all-time high before $BTC.”
“The current price of Ethereum dollars is closer to the ATH than the $BTC price. Increased demand, decreased supply. The $ETH sell-side liquidity crisis continues to escalate, whereas the $BTC exchange reserve reversed its downward trend in May,” Ki added.
When recent numbers are analyzed, it is evident that the reserves of coin exchange on Bitcoin have been decreasing since May. Still, an anticipated rebound was observed in late July. However, none of this changed the fact that BTC reserves fell to 2.44 million this week from a high of 2.54 million on July 26.
On the other hand, ETH has been on an essentially linear downward trend since late May’s local peak held on exchanges, amounting to over 21.43 million. It provided the way for the exchange balance of 19.25 million as of this week.
Supply shock battle
Ki is not the only one who anticipated a more ferocious bull charge for Ether than for Bitcoin. According to analysts, vital statistics indicate that an altcoin season is on the way.
As reported by Cointelegraph, Bloomberg Intelligence recently favored ETH above BTC in their study, even predicting a “flipping” of the biggest cryptocurrency.
Meanwhile, evidence continues to indicate that a supply shock is occurring for Bitcoin as well. It is not new considering that Bitcoin has a history of causing BTC price run-ups.
“Over the last several months, the Illiquid Supply Shock ratio has been a strong leading indicator,” remarked analyst William Clemente III on the new data from Glassnode.
He added that “impulses have influenced price action in both directions. Watching for another big impulse as the measure continues to grind steadily higher, as it is presently at levels over 58K BTC.”