Ether (ETH), the cryptocurrency that powers the smart contract-enabled Ethereum blockchain and dominates the DeFi, NFT, and broader web3 industries, has made headlines this week. It surged close to 11% since Sunday after BlackRock, the asset manager giant, filed to set up a spot Ethereum ETF with Nasdaq.
After months of being overshadowed by Bitcoin, Ether soared above $2,100 for the first time since April. BlackRock’s filing with the SEC to establish a spot Ethereum ETF follows its previous application for a spot Bitcoin ETF in June, which triggered a series of similar applications from rival asset managers. This marked a significant turning point for the Bitcoin market, with prices surging around 45% since June.
The recent announcement of BlackRock’s spot Ethereum ETF plans could have the potential to shift the dynamics of the crypto market. While Bitcoin has dominated in recent months, there are indications that Ethereum’s spot ETF optimism-fueled rally could pave the way for a broader market rally, with Ethereum outperforming Bitcoin.
Markus Thielen’s Call for ETH Outperformance
“Prior to BlackRock’s spot Ethereum ETF announcement, Markus Thielen, head of research at Matrixport, made a well-timed call for a new period of ETH outperformance,”
Thielen highlighted the improvement in Ethereum network on-chain activity and its deflationary nature, as well as a technical breakout from a long-term pennant structure. He predicted a rally back towards $3,000 for Ether.
Bullish Predictions for Bitcoin
While the focus is currently on spot crypto ETFs, traditional financial market developments also have an impact on the crypto market. Investors are becoming increasingly optimistic as the US economy shows signs of slowing down and weaker-than-expected economic data suggests a less hawkish stance from the Federal Reserve. This easing of financial conditions bodes well for cryptocurrencies, which historically perform well in such environments.
Meanwhile, major altcoins like Chainlink, Solana, and Polygon have experienced significant pumps in the past week. This suggests that altcoin season may be approaching, with the potential for disproportionate upside in the altcoin market if Bitcoin continues to rally.
Looking ahead, the focus will remain on news related to spot crypto ETFs in the US. However, macro events such as the US Consumer Price Index inflation and Retail Sales figures for October could further fuel the crypto rally if they trigger a pullback on Federal Reserve tightening expectations.
Bitcoin bulls are eyeing the key psychological level of $40,000, while Ether bulls are pushing for a breakout above the mid-$2,100s, which could open the door to a rally towards $3,000.
