5 Reasons Ethereum Could Outperform Bitcoin in Dec and Jan

by

As a seasoned crypto investor with battle scars from the 2022 crypto winter etched deeply into my portfolio, I can confidently say that the resilience of Bitcoin and Ethereum has been nothing short of remarkable. While the crash was so brutal it sent some Web3 founders to jail, Bitcoin’s steadfast climb back up has been a beacon of hope for us all.

Over the last two years, Bitcoin has significantly recovered following the cryptocurrency winter of 2022. This period was marked by a challenging cycle of market corrections, including numerous financial struggles and bankruptcies affecting prominent players within the blockchain industry.

As a result of the severe crash, some Web3 pioneers who violated laws ended up serving time in prison following the subsequent market adjustment.

However, throughout 2023, Bitcoin – the original, longest-standing, most secure Satoshi chain – gradually built higher levels of support, eventually experiencing a significant surge in value during 2024.

2025: Ethereum at a Glance

In recent times, the prices of Ethereum and other alternative coins (altcoins) have mirrored Bitcoin’s growth. Notably, Ethereum, being the second-largest cryptocurrency by market value, hasn’t shown the same level of enthusiasm as Bitcoin, which has resulted in a more significant rise for Bitcoin.

Bitcoin stands out with its declared simplicity as a worldwide tool for computing tiny sums that represent immense values, all secured through a robust and complex computerized hash system, and influenced by the dynamics of market trends.

In essence, Ethereum is designed to manage greater intricacies, functioning as a versatile global computer for various applications. Its value lies in its ability to dependably support robust smart contracts on a self-governing network, where the rules are enforced not by traditional rulers but by computer code and without intervention from civil authorities.

The main hurdle Ethereum currently faces is finding a way to make things less complex, without losing its automated nature and role as a forum for its users. In simpler terms, the goal is to make it more user-friendly, while still maintaining its automation and community aspects.

In a December 7th post on X, the co-founder of the smart contract platform, Vitalik Buterin, emphasized this point: “If Ethereum abandoned verifiability and opted for committees and centralized intermediaries for all aspects, I would no longer consider it as Ethereum.

As Ethereum’s primary developers steer its progress, let me share with you five potential factors that could cause the value of cryptocurrency exchanges for their ETH tokens to surpass Bitcoin’s percentage increase within the subsequent 60 days:

1. Ethereum Technical Analysis

Recently, as a dedicated crypto investor, I’ve been closely following the insights of Cryptos Batman, a well-respected analyst in our community. In his latest post on platform X, he pointed out an intriguing observation: Ethereum’s price has breached a 3-year bearish trend line. This could be a sign of a bullish trend reversal, much like how Bitcoin has surged in the past few months. So, keeping a close eye on Ether’s trajectory seems prudent, as it might be gearing up for a significant flight.

Ethereum Breaks 3-Year Bearish Trendline

For the first time in 3 years, $ETH has closed a candle body above its upper bearish trendline.

This week’s retake indicates a positive development, paving the way for a long-term upward trend. Chances like these are scarce, so don’t let them pass you by!

— BATMAN (@CryptosBatman) December 9, 2024

For the first time in three years, the Ethereum price has finished an candlestick pattern above its upper bearish trendline, according to Cryptos Batman. This week’s retest suggests a positive development that could lead to a lasting increase. Such chances don’t come along frequently, so it’s advisable not to let this one pass by!

2. Excellent Trump Bump Prospects

Apart from a robust technological foundation supporting an Ethereum price surge, the political and regulatory climate for this asset is incredibly advantageous.

Trump’s election campaign heavily emphasized a pro-cryptocurrency growth policy, which is beneficial for the broader blockchain sector. This could potentially boost the price of Ethereum on cryptocurrency exchanges.

Compared to Bitcoin, Ethereum and its ERC20 tokens have historically faced greater regulatory risks due to their association with decentralized finance. Therefore, the value of Ethereum could potentially benefit significantly more under a pro-growth administration that supports the expansion of this sector.

3. Santa Claus Rally for Ethereum Incoming?

Typically in the annals of liquid financial markets dealing with tradeable goods such as stocks and cryptocurrencies, there’s a common phenomenon known as the “Santa Claus Rally.” This rally often occurs near the end of the year and continues into January, marking a period when these assets tend to yield their highest profits on trading platforms.

To date, a similar trend has been observed in the Bitcoin and other cryptocurrency markets. In particular, Bitcoin (BTC) along with coins such as Ethereum have shown significant growth, climbing steadily up the market rankings during December and January.

In my analysis during the latest Santa Claus rally occurring around the 2020-21 Bitcoin halving, and analogous to the upcoming December-January phase for 2024-2025, it was evident that Ethereum’s price outperformed Bitcoin significantly.

Here are the figures for that cycle:

On December 21, 2022, Bitcoin was worth $24,059 and Ethereum was priced at $646. However, by January 18, 2023, the highest Bitcoin traded reached $37,299, representing a 55% increase compared to its previous high. For Ethereum, the price skyrocketed to $1,259 on the same date, marking a massive 95% surge from its earlier high of $646.

4. BTC Crushed Already ATHs in ‘24, Ether’s Waiting

From my perspective as a crypto investor, it’s crucial to keep an eye on the fundamentals like the value proposition and market conditions. If these factors align, understanding the potential for “mean reversion” or a return to the average trend line becomes significant when predicting a cryptocurrency’s price movement.

Whatever ascends will eventually descend, and whatever remains stationary can only head back up. Consequently, it appears that Ethereum prices on cryptocurrency exchanges might follow suit and start going back up in the upcoming market trends.

In simpler terms, Bitcoin has surpassed its previous highest price point during this market halving period, something Ether hasn’t done yet. This suggests that the “altcoin season,” a term used when alternative cryptocurrencies experience significant growth relative to Bitcoin, may still be on the horizon if past trends in the crypto market repeat themselves.

5. Institutions Are Catching Up to Ethereum

For institutional investors on Wall Street, Bitcoin is considered both regulated and secure. However, alternative cryptocurrencies (altcoins) have not yet achieved the same level of favor from U.S. financial and commodities regulators as Bitcoin has.

Among other digital currencies, Ethereum is distinctive due to its growing potential to reach the same degree of public adoption as Bitcoin. Notably, similar to Bitcoin, Ethereum offers regulated investor-friendly Exchange Traded Fund (ETF) products.

However, the trend toward increased institutional adoption of Ethereum is a tailwind for its price, which markets are counting on as the exchanges continuously revise the valuation for Ether.

Read More

2024-12-14 18:19