The price of Ethereum surged past $3,000 on February 20, surpassing Bitcoin’s 22% growth. The ETH 2.0 staking deposit trends observed this week suggest that the gap may widen further.
The media frenzy surrounding the approval of a Bitcoin ETF saw BTC price outperform ETH during the early stages of the 2024 market rally. However, this market trend has reversed since early February.
As investors look for the long term, the bulls could take advantage of the growing ETH 2.0 deposits and dwindling market supply to drive a rally above $4,000.
Ethereum outperforms BTC despite record ETF inflows.
Bitcoin has dominated media headlines in recent weeks, and for good reason. Since the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin ETF on January 11, BTC has received unprecedented interest from institutional inflows.
As of February 19, just six weeks after trading began, the 10 newly launched ETFs had acquired more than 654,000 BTC, or a value of more than $36 billion. Despite record BTC ETF inflows, ETH price performance outperforms BTC.
According to historical price charts, BTC price increased 24.2% in February, rising from $41,864 to a monthly high of $52,985.
Meanwhile, the price of ETH was even more impressive, rising 33.7% from $2,241 to $3,000 on February 20 for the first time since April 26, 2022.
Investors make long-term investments in Ethereum.
Thanks to the smoothly executed Dencun upgrade, Ethereum received considerable praise from the media.
The on-chain data trail shows that investors playing the long game, staking their coins for upfront profits from the impending ETH ETF approval, played a pivotal role in ETH’s furious price action outperforming BTC in February.
Investors pulled out more than $1.5 billion worth of coins last week, depositing 504,799 ETH into ETH 2.0 staking contracts on February 13 and February 20.
This brings the total staking deposits on the Proof-of-Stake (PoS) network to 30,064,242 ETH, according to official data collected by Beacon Chain.
A significant increase in staking deposits during a bull market is a positive trend for all PoS networks. The increase in staking deposits improves network security and stability amidst increased network activity and is a sign that most large ETH investors are willing to play the long game despite the price rise.
The $1.5 billion increase in ETH staking while the price hit a two-year high signals a surge in investor confidence and commitment to the security of the network.
If this trend continues, dwindling market supply due to soaring market demand could lead to ETH price outperforming BTC in the coming weeks, especially considering the lack of large-scale staking yield incentives comparable to the Bitcoin network. can.
Prediction: Can Ethereum Price Reach $3,500?
Drawing on data-driven insights from market trends, ETH price appears poised for a further rise towards $3,500 in the coming weeks.
However, historical accumulation trends suggest that ETH faces strong resistance in the $3,200 area.
IntoTheBlock’s global GIOM (money deposits and withdrawals) data groups all existing ETH investors by their entry price. GIOM shows that 12.9 million existing holders acquired 4.74 million ETH at a price of at least $3,212.
However, given that this is the largest cluster of holders who have purchased ETH above the current price, a decisive break above $3,200 could effectively open the door to a larger rally towards $3,500, as expected.
The downside could still nullify this lofty forecast if the price falls below $2,500. Nonetheless, in this scenario, 5.2 million addresses acquiring 4.1 million ETH at a minimum price of $2,548 could set up a significant buywall.