3 reasons why Ethereum (ETH) price is strengthening against Bitcoin

Ether is ignoring bearish headwinds in the crypto market by showing strength at the $2,500 support level.

Ether (ETH) price is holding on to the $2,500 handle even as data shows futures liquidations rising.

According to data from monitoring resource Coinglass, Jan. 16 saw $15.03 million of ETH shorts liquidated against $5.3 million long liquidations.

This coincided with the ETH/USD pair rising to highs of $2,614, breaking through the resistance at $2,500.

Further data from on-chain analytics firm Glassnode captured the dominance of short versus long liquidations on Jan. 16.

A report by 10xResearch reveals Ether’s increasing share of open interest since the start of the year.

According to the report:

“Open interest share in perp futures has remained flat for BTC (41.6% on Jan 1. Vs. 41.1% now), while ETH’s share of open interest has increased from 21.8% to 26.5%.”

Investors expect ETH/BTC appreciation to continue

10xResearch also highlighted that the Bitcoin (BTC) dominance indicator dropping below 50% for a fourth day. This is often seen as a sign that altcoins can sustainably perform better than Bitcoin.

According to the chart below, ETH’s dominance has climbed to a three-month high above 18%.

Data from on-chain data provider Santiment shows Ethereum’s price dominance surging against Bitcoin, marking a +22.4% increase in the past week.

This period also saw the creation of roughly 89,400 new Ethereum addresses per day, further underscoring the platform’s growing traction. Notably, a staggering 96,300 wallets were created on Jan. 16 alone.

exchanges is getting close to reaching its #AllTimeLow (since the opening week of trading) of 8.05%. Movement to self custody & staking implies less risk of an impending selloff, as opposed to a more concerning rising supply on exchanges.

Link to chart: https://t.co/NQf3x6BGKt

— Santiment (@santimentfeed) January 16, 2024

The data also shows ETH’s supply on exchanges nearing its all-time low of 8.05%.

This signals movement toward self-custody and staking, implying a reduced risk of an imminent sell-off, presenting a more favorable scenario compared to concerns arising from a rising supply on exchanges.

These on-chain metrics shed light on Ether’s current market strength and its potential to outperform Bitcoin in the short term.

Related: Vitalik Buterin says L2s using Celestia are validiums, not genuine rollups

Ethereum Dencun upgrade deploys proto-danksharding on Goerli

The newest upgrade to the Ethereum network, codenamed “Cancun-Deneb” or “Dencun,” has gone live on the Goerli testnet, according to a Jan. 17 social media post from Ethereum developer Parithosh Jayanthi.

The goerli fork finalized! :Dhttps://t.co/LIa3d4Ml5H

After the fix was patched in, the validators came back online and the chain started finalizing again. The MEV circuitbreaker automatically disables and mev-blocks have started flowing through as well.

Yay client diversity! https://t.co/cLz3ZRxnXq

— parithosh | (@parithosh_j) January 17, 2024

At the heart of the Dencun deployment on the Goerli testnet is the implementation of EIP-4844, which is expected to significantly lower the cost of transactions on Ethereum layer 2s such as Optimism, Base, Polygon zkEVM and others. It will also limit self-destruct operations and allow for new bridge and staking pool features.

According to Ethereum’s 2024 roadmap, the next big moment in Dencun’s testing schedule will be Jan. 30, when it is slated to be implemented on the Sepolia testnet.

The Holesky testnet will follow on Feb. 7. The team has not yet announced a date for implementing the upgrade on the mainnet.