Ether Surges Ahead of Bitcoin: Is a 20% ETH Rally on the Horizon?

Ether has recently shown a stronger performance than Bitcoin in terms of price movements and exchange-traded funds (ETFs) inflows, signaling a possible shift in investor sentiment. This article explores the latest trends, potential corrections, and the implications for future ETH rallies.

Key Takeaways

Spot ETH ETFs have gathered three times the inflows compared to BTC, indicating a shift in momentum.
Current price action for ETH suggests it may have reached a bottom.
Retail investors are accumulating Ether, although a slight pullback might occur before a stronger rally.
ETH has displayed a more favorable technical setup compared to Bitcoin, enhancing its prospects for growth.

Ether Surges Ahead of Bitcoin: Is a 20% ETH Rally on the Horizon?

Retail Investors Show Interest in Ether

Recent data from CryptoQuant indicates a significant change in Ether market behavior. When ETH prices dropped below $2,700 on November 21, retail investors quickly stepped in, leading to a rapid demand-driven recovery. This pattern echoes previous accumulation phases, particularly from March to May, when retail activity typically foreshadowed deeper corrections.

Cryptocurrencies, Bitcoin Price, Investments, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Ether Price, Ethereum Price, Ethereum ETF
Ether's spot average order size from retail. Source: CryptoQuant

Historically, rebounds driven by retail buyers at local lows can precede a final liquidity check, potentially shaking out late investors before a more robust rally begins. This suggests that ETH could still experience a measured pullback to recalibrate positions ahead of a sustained upward movement.

Ethereum's net unrealized profit/loss (NUPL) is currently around 0.22, signaling a balanced market where most investors are enjoying moderate profits without veering into over-exuberance. Notably, the NUPL has not dipped into negative territory, indicating a strong holder base that lowers the chances of significant selling pressure. As long as NUPL stays above 0.20, sentiment remains positive for a rebound once catalysts align.

Cryptocurrencies, Bitcoin Price, Investments, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Ether Price, Ethereum Price, Ethereum ETF
Ether NUPL data on Binance. Source: CryptoQuant

Ether Outperforms Bitcoin

From a technical perspective, Ether is presenting a clearer high-time-frame (HTF) scenario than Bitcoin. ETH recently confirmed a significant break in structure (BOS) by reaching a 20-day high above $3,200, indicating that buyers have effectively overturned previous resistance levels, resulting in a trend shift.

On the other hand, Bitcoin is still in need of a decisive close above $96,000 to confirm its breakout, leaving ETH with a structural edge.

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BTC and ETH one-day chart comparison. Source: Cointelegraph/TradingView

The daily chart for the ETH/BTC pairing further highlights this advantage. The pair has recently broken out of a 30-day consolidation zone, where supply had been limiting upward movement. This breakout was solidified by a successful retest of the 200-day simple moving average (SMA), which has acted as a trend baseline since July. Historically, when ETH/BTC reclaims the 200-day SMA while breaking out of multi-week ranges, it often precedes phases of substantial ETH outperformance.

Cryptocurrencies, Bitcoin Price, Investments, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Ether Price, Ethereum Price, Ethereum ETF
ETH/BTC one-day chart analysis. Source: Cointelegraph/TradingView

If Bitcoin stabilizes above $94,000 and closes over $96,000, it could relieve some upward pressure on altcoins like Ether. In this scenario, ETH is positioned to further extend its new uptrend, potentially targeting a retest of the recent swing high at $3,650, with the next goal set at $3,900, representing a possible 20% increase from current levels, where external liquidity clusters are present.

Related: Bitcoin experiences its strongest trading day since May, signaling a possible rally to $107K