While Bitcoin and the entire crypto market have remained stagnant for the past few weeks, Ethereum is trying very hard to break out of the market. Although hard, the second-largest cryptocurrency is now consistently crossing the $3,000 level and staying above it. Apparently, the implication of this is the reduction in Bitcoin dominance while that of Ethereum increases. In this article, we explore the recent changes in Bitcoin market dominance and the factors contributing to the rise in Ethereum price momentum.
Bitcoin Dominance Decreases Why Ethereum Appreciates
According to data from CoinMarketCap, Bitcoin dominance is currently decreasing, providing altcoins like Ethereum, Solana, and BNB the opportunity to increase their market dominance. As of April 16th, Bitcoin had a dominance of more than 54% in the market. However, this reduced to about 53%, allowing Ethereum’s dominance in the market to grow above 15.92%. Nevertheless, certain factors contribute to the growth of Ethereum’s dominance and independence from Bitcoin price movements. They include:
Improved Bulls and Bears Metric
According to data from IntoTheBlock, the bulls and bears metric for the Ethereum token has significantly improved over the weeks. This metric simply represents the number of addresses that either purchased or sold 1% of the volume traded in the last 24 hours. Thus, the bulls seem to be having the upper hand, with over 3.26 million Ethereum bulls in the previous seven days compared to the 3.2 million for the bears.
Hong Kong’s ETF Launch a Pillar for Ethereum Growth
It is undeniable that the market has been brought rough for the broader crypto market, especially with deteriorating macroeconomic metrics. Apparently, this includes the persistent inflation in the United States and the depreciation of the yen. Moreover, other commodities also contribute to the continued downturn of the crypto market, with WTI oil prices dipping to their lowest in over 50 days at $78.18 on May 2.
However, the recent trading of Ethereum Spot ETFs in Hong Kong, starting from the last day of April, is a contributing factor to what is keeping ETH alive as Bitcoin dominance depreciates. On the first day of its trade, the Ethereum ETFs saw net inflows of $44 million.
Increasing Network Activity
An increase in network activity also contributes to the advancement of Ethereum’s dominance in the crypto market. According to data from Messari, there’s a significant increase in the value of transactions happening on the Ethereum network, increasing from a meager $3.1 billion as of May 4th to more than $4.9 billion on May 6th. Nevertheless, this is still lower than a significant high of more than $8.25 billion as of April 4th. Dappradar also shows the Ethereum blockchain currently has over 1.7 million transactions as of May 7th, representing over 16% growth.
Conclusion
Ethereum suffered from a massive price decline due to Bitcoin falling below its all-time high of over $73k and dropping below $60k in the space of weeks. Apparently, this made Ethereum’s price drop, following a 14.2% decline from April 28 to May 1, making its price come down to $2,817. However, Ethereum is back to building momentum, staying consistently above $3,000. Apparently, factors like better bulls and bears metric and the Hong Kong ETH ETF launch contribute to the positive growth.
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The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from the company.
