Ethereum’s price action appeared to be somewhat bullish earlier this week when it was gaining some momentum independent of Bitcoin as it climbed into the mid-$130 region, although this momentum has been halted as BTC struggled to maintain above its previous key support level at $7,000.
ETH has been able to see some tempered gains against Bitcoin today, and in the long-term analysts are now noting that there is another key factor that could hold significant sway over where Ethereum and other cryptocurrencies head throughout 2020.
Ethereum Sees Slight Gains Against BTC, But Wallet Address Growth May Provide Insight into Future Trend
At the time of writing, Ethereum is trading down over 3% at its current price of $127, which marks a notable decline from its recent highs of $133.
These highs were set this past weekend when Bitcoin attempted to rally to $7,500, but the lack of strength amongst bears made this move fleeting and led the aggregated crypto markets to see a strong sell-off.
Previously, this sell-off was tempered by the support that Bitcoin has found within the lower-$7,000 region, but this morning’s sharp decline below this level may signal that further losses are imminent for the cryptocurrency.
If BTC declines back to its multi-month lows of $6,400 in the near-term, major altcoins like Ethereum could soon see significantly further downside.
It is important to note that Ethereum has been able to hold its own against BTC’s downside today, and its BTC trading pair is now pushing up against the upper boundary of a descending channel, with a break above this level potentially allowing it to climb significantly higher.
“$ETH: I told you it looked better than $BTC,” Scott Melker, a popular cryptocurrency analyst on Twitter, explained in tweet while pointing to the chart seen below.
I told you it looked better than $BTC. pic.twitter.com/99Xa9OPSzc
— The Wolf Of All Streets (@scottmelker) January 2, 2020
One unique and under-discussed factor that could provide insight into where Bitcoin and other cryptocurrencies are heading in the year ahead is the trends surrounding its active wallet addresses.
Luke Martin, another popular crypto analyst, explained in a recent tweet that the growth or decline in active wallets seems to have a direct correlation with its price performance.
“The 4 major coins with declines in active addresses for 2019 all had negative performance for the year: $ETH, $XRP, $XLM, $ZEC. Top 3 best performers had solid active address growth: $BTC, $XTZ, $LINK,” he noted.
The 4 major coins with declines in active addresses for 2019 all had negative performance for the year:$ETH, $XRP, $XLM, $ZEC
Top 3 best performers had solid active address growth:$BTC, $XTZ, $LINK
h/t @coinmetrics pic.twitter.com/SxakRLuz9V
— Luke Martin (@VentureCoinist) January 2, 2020
As for how this relates to Ethereum, the cryptocurrency has been seeing an ongoing decline in its number of active addresses, which may extend further into 2020, leading the crypto to see further losses.