Ethereum
$612.20 6.29%
ETH · 5w

Ethereum Snapping at Bitcoin’s Heels As Crypto King Eyes Two Major Levels of Resistance: eToro Market Analysis

Bitcoin approaching 2019 levels – but the environment has evolved

In the short term, $12,000 remains the next resistance level, but with an eye on the future, I would also be conscious of the $14,000 level, which has historically been tough for Bitcoin to break. The last high in June 2019 was the last time it approached that level.

However, the current market backdrop is markedly different than it was last year. In my view, the fundamentals are stronger than in June 2019. Combine positive on-chain metrics with an environment of continued monetary and fiscal stimulus (although time seems to be running out for another package now) and the potential for above 2% inflation. Should Bitcoin break through the next two resistance levels, then it would seem much more likely to manage a sustained bull run instead of dropping back down.

While there has already been expansion of Bitcoin’s investor demographic (more on firms such as Grayscale later), any prominent mainstream media coverage of the cryptoasset hitting all-time highs will no doubt drive yet further investment. Retail investors may also recognize the prominence of institutional players in the space – plus the seemingly lower levels of volatility now than in 2019 – and take to Bitcoin in levels similar to the famous bull run of 2017. Fidelity highlighted some of the benefits that Bitcoin can bring to investment portfolios, such as its lack of correlation to other investment assets. The report also highlighted that should an increase in institutional investment occur, the market cap of Bitcoin could increase by hundreds of billions of dollars.

Altcoins snapping at Bitcoin’s heels

Ethereum is following in Bitcoin’s tracks, hitting $371 on Tuesday. In fact, it carried a Pearson Correlation Coefficient of 0.92 over the past week. Despite this high recording, the longer-term figure has been steadily decreasing, according to Coinmetrics.io.

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