As Bitcoin shows bearish signs, activity on the chain suggests that Ethereum could be on track to hit its all-time high before BTC.
Will Ethereum Hit Its Highest Price Before Bitcoin?
As CryptoQuant CEO Ki Young Ju pointed out in a mail, the indicators could suggest that ETH will reach its ATH faster than BTC in the long term.
The net flow of exchange is an indicator that depends on two metrics: the entry and the exit. The first is the total amount of the asset that is moved from personal wallets to exchanges.
While the latter is the opposite; is the total amount of Ethereum (or Bitcoin) exiting the exchange portfolios. When the value of the ticket increases, it means that more cryptocurrencies are being sent to exchanges for the purpose of selling or buying altcoins.
On the other hand, when the exit indicator shows a rally, it implies that more investors are interested in hoarding their coins, or perhaps selling them through OTC deals.
The netflow metric for Bitcoin or Ethereum is just the difference from the two previous indicators. A positive value shows that the inflows are overwhelming exits, possibly indicating that there is selling pressure in the market.
Similarly, a negative net cash flow value may imply that there is buying pressure in the market, as the outflows are greater than the inflows.
Now, this is how the 30-day moving average (MA) netflow It seems for Ethereum over the past year:
Ethereum shows big negative spikes in recent months | Source: CryptoQuant
As the chart above shows, ETH has seen many major negative spikes recently. This means that there is buying pressure in the market, as many investors are withdrawing their cryptocurrencies from exchanges and storing them in personal wallets.
This shows that due to high demand and low supply, the liquidity crisis on the selling side of ETH continues to intensify. Such an environment could help drive the price in the long run.
However, BTC doesn’t seem to be that lucky. Foreign exchange reserves, an indicator that shows the total number of currencies in exchange portfolios, stopped the downtrend in May. This means that exchanges still receive a significant amount of coins for sale purposes.
On top of that, the current price of ETH is closer to ATH than BTC. So, looking at the big picture, Ethereum can hit its ATH faster than Bitcoin in the long run.
At the time of writing, The price of Ethereum floats around $ 3k, almost 6% less in the last 7 days. The following chart helps to show the trends in the price of the cryptocurrency during the last three months:
ETH crashes down 6% in the last 24 hours | Source: ETHUSD on TradingView
Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com