- Ether has shown more resilience in the recent liquidity shock.
- The altcoin has been projected to continue its impressive run by America’s largest bank.
Ethereum has in the last 12 months surged by 1,283 percent, and in the last 30 days gained 50 percent. This has sent the price to an all-time high of $2,736. Bitcoin on the other hand has drifted away from its all-time high of $64,000 in the last couple of weeks and lost some of its dominance. In the last 30 days, the digital asset has lost over 6% of its value to trade at a current price of $54,000. According to JPMorgan, the market run by Ethereum can be linked to three main factors:
According to JPMorgan, Ethereum has finally overtaken Bitcoin in terms of demand for its utility. Ethereum was designed to facilitate transactions at a higher speed than Bitcoin on the public blockchain. Today, this is paying off. Ether is more liquid at 11 percent compared to Bitcoin at 4 percent according to the bank.
“In a market with significantly higher spot turnover, it is plausible that the underlying base of long exposure is less reliant on leverage in the form of futures and swaps,” the bank stated.
Liquidity shock in the crypto market
Last week, the cryptocurrency market was hit by a liquidity shock in which only a few survived. Bitcoin was massively affected compared to Ether. According to JP Morgan, the liquidity shock came from the derivative market, largely affecting Bitcoin futures and causing a 23 percent ex-ante open interest. The net long liquidation of Ether since the market pulled back was 17 percent. JPMorgan lauded the dramatic comeback by Ether compared to the rate at which the other cryptocurrencies added value in their recovery process.
Data from CoinMarketCap confirms that Ether has gained 10 percent value in the last 7 days while Bitcoin has gained just 0.02 percent in the same period. BNB, one of the best-performing assets in the last couple of weeks has also gained just 2 percent value in the same period.
Less reliance on derivative markets
JPMorgan explained that Ethereum has shown less reliance on the derivatives market than Bitcoin. This is laudable in a market with significantly higher spot turnover.
The bank observed that Ether has the potential to outperform Bitcoin in the future. Ether has been tipped to enter the $3,000 price zone as the intermediary-term momentum is strong. Similarly, the long-term momentum looks bullish. The early month breakout from the technical point of view is said to be a bullish bias beyond the coming weeks.