We think this is the beginning of the market re-rating Ethereum for EIP 1559 & Proof of Stake. A deflationary asset – where each block, negative Ethereum are issued. This means ETH will be a more deflationary asset than bitcoin.
In addition, Ethereum’s success in the crypto markets has resulted in the ratio between its market cap and Bitcoin’s, doubling in the last year as visualized through the following chart.
In conclusion, Mr. Morehead went on to forecast that the rising DeFi ecosystem on Ethereum and the adoption of ETH, will ultimately lead to the digital asset gaining market share relative to Bitcoin.
Ethereum has a massive ecosystem of decentralized finance use cases with rapidly growing adoption.Combine these two dynamics and we think Ethereum will keep gaining market share relative to Bitcoin.
At the time of writing, Ethereum is trading at $3,800 after a brief dip to $3,620 earlier today.
The latter price area has created a double-bottom pattern with the May 13th low of $3,540 when Elon Musk announced that Tesla will no longer be accepting Bitcoin for car payments.
Therefore, with the weekly close only hours away, $3,600 and $3,500 will be two levels to watch leading up to the event. They will determine whether Ethereum continues on its bullish path above $4k.