Crypto Analyzer

Analyst Bullish on Ethereum amid $2.9K jump

## Analyst Bullish on Ethereum Amid $2.9K Jump

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has recently made significant strides in the crypto market, outshining Bitcoin’s (BTC) rally by crossing the $2,900 mark. This surge in Ethereum’s price has attracted the attention of analysts, with many projecting a potential shift in focus towards ETH over Bitcoin. The recent bullish sentiments surrounding Ethereum can be attributed to various fundamental factors and developments within the Ethereum ecosystem.

### Fundamentals Fueling Ethereum’s Growth

Greg Magadini, the Director of Derivatives at Amberdata, has expressed bullishness towards ETH, highlighting that Ethereum’s fundamentals appear more promising compared to Bitcoin. Ethereum has experienced a notable gain of over 16% in the past seven days, surpassing $2,900 for the first time in nearly two years. This performance has led to an increase in the Ether-Bitcoin ratio, further indicating Ethereum’s outperformance.

The recent attention on Ethereum comes as a result of the upcoming spot Ethereum Exchange-Traded Funds (ETFs) in the U.S. and the reduction in Ethereum’s supply due to the implementation of the Proof-of-Stake (PoS) consensus mechanism known as “The Merge.” Magadini notes that while Bitcoin’s upcoming halving has garnered significant focus, Ethereum has already undergone a reduction in its supply post the transition to PoS, making it an attractive investment opportunity.

One of the significant milestones in Ethereum’s journey to PoS is the amount of ETH locked in the Beacon Chain, with over $111 billion worth of ETH currently staked. This achievement aligns with Ethereum’s recent price surge, indicating growing confidence in the cryptocurrency.

### Deflationary Trend and Supply Reduction

Since The Merge, Ethereum has witnessed a deflationary trend with a portion of ETH being burned or taken out of circulation. Data from Ultrasound.money shows that 1,047,643 ETH have been issued while 1,407,200 ETH have been burned, resulting in a net supply reduction of 359,557 ETH or 0.209% year-on-year. This reduction stems from Ethereum burning a portion of transaction fees paid to validators, effectively reducing the available supply of ETH in the market.

In addition to supply dynamics, regulatory developments also play a crucial role in driving investor interest in Ethereum, with the expectation of the Securities and Exchange Commission (SEC) greenlighting spot ETH ETFs in the U.S. later this year. This regulatory approval could further boost investor confidence and liquidity in the Ethereum market.

In conclusion, Ethereum’s recent surge and bullish outlook indicate growing confidence in the cryptocurrency’s fundamentals and developments. As the focus potentially shifts towards Ethereum amid favorable factors, investors are closely monitoring its performance and potential for further growth in the crypto market.