Current Ethereum Price: $2,670
- Ethereum stands to benefit significantly from institutional investments due to appealing staking yields.
- Bitcoin’s influence over Ethereum is limited by potential diminishing returns as its market cap exceeds $2 trillion.
- For Ethereum’s bullish outlook to continue, it must sustain a rising trendline and maintain support from the 50-period EMA.
Ethereum (ETH) is trading above $2,600 on Wednesday, with forecasts suggesting it may eventually outperform Bitcoin (BTC), which could experience slower growth due to diminishing returns from its increasing market cap.
Ethereum’s Potential Ascendancy as Bitcoin Faces Diminishing Returns
After a significant rise of over 40% in May, following the successful Pectra upgrade, Ethereum has regained notable attention in the cryptocurrency space. The ETH/BTC trading pair, previously in a downtrend since November 2022, has now gained over 30%.
The recent outperformance of Ethereum has ignited discussions about a potential altseason led by ETH, despite strong institutional investments pushing Bitcoin to a new all-time high last week. Various companies, including Trump Media and Strive, are looking to implement a Bitcoin treasury strategy similar to Strategy’s BTC accumulation approach.
While Bitcoin’s strong performance has dampened speculations about an altseason, Ethereum has shown relative resilience, as highlighted in recent charts.
According to Jag Kooner, Head of Derivatives at Bitfinex, “This strength occurring concurrently with BTC price acceleration is particularly bullish: capital isn’t leaving Bitcoin but is instead diversifying across various layer ones. This could signal the start of Phase 3 in the crypto bull cycle, where BTC stability allows ETH to gain traction alongside capital spreading into select altcoins.”
However, Marcin Kazmierczak, co-founder and COO of Redstone, expressed doubts about Bitcoin’s sustained dominance as its market value approaches the $2 trillion mark, noting diminishing returns on institutional inflows at current levels. He anticipates Ethereum becoming a preferred choice for institutions as BTC nears the $150K-$200K range.
Ethereum Price Outlook: Key Support Levels for Continued Momentum
In the past 24 hours, Ethereum has noted $52.12 million in futures liquidations, according to Coinglass data, with total long liquidations at $34.6 million and shorts at $17.48 million.
After bouncing off the $2,500 level on Monday with an 8% rise, Ethereum encountered resistance just above $2,700 on Tuesday, which reinforced the crucial resistance zone at $2,750. Following this setback, Ethereum has stabilized around $2,600 on Wednesday.
To initiate a new uptrend, Ethereum bulls need to significantly counteract selling pressure around the $2,750-$2,850 zone and convert it into support. On the downside, a rising trendline, supported by the 50-period Exponential Moving Average (EMA), may offer short-term support. A decrease below these levels could push Ethereum toward support between $2,260 and $2,100.
The Relative Strength Index (RSI), Stochastic Oscillator (Stoch), and Moving Average Convergence Divergence (MACD) all indicate a short-term bullish sentiment as they remain above their neutral points.
