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PrimeXBT Analyst Expects Bitcoin To Hit DeFi-Powered Ethereum Success

PrimeXBT Analyst Expects Bitcoin To Hit DeFi-Powered Ethereum Success

| CryptoPress

 Although Bitcoin is the best performing asset of 2020, outperforming gold, stock indices, oil trading and anything else, Ethereum has outperformed the leading cryptocurrency by market capitalization by a wide margin.

Ethereum rallied from $ 130 to $ 490 in 2020 alone and remains above 180% to date. Bitcoin, on the other hand, has only had a 60% Return on Investment (ROI) for the year. Ethereum’s further success was fueled by the popularity of decentralized finance. Ethereum benefited substantially as ETH gas rates soared due to DeFi tokens using the ERC20 smart contract standard.

However, DeFi has finally started to cool down and Bitcoin has already started to outpace Ethereum’s growth. Bitcoin’s strong fundamentals could soon see the top cryptocurrency “catch up” with Ethereum by the end of 2020, according to PrimeXBT Senior Analyst Kim Chua.

Ethereum and DeFi token outpace BTC

DeFi, and the sudden emergence of dozens of new tokens designed to enable permissionless lending, yield farming, and a host of new crypto-asset buzzwords, has pulled the crypto market out of the bear market and back on the market. center of attention. Crypto assets have been the best performing asset class of 2020, during a time when inflation is skyrocketing and stimulus money is plentiful.

The majority of DeFi tokens were built on top of Ethereum, which has caused demand to surge to pay for the rising ETH gas fees as the network became congested. It helped keep Ethereum pumped much more than Bitcoin, setting a higher high that Bitcoin has yet to climb.       

 The rise of Ethereum almost perfectly mimics the total value locked on the DeFi chart, demonstrating an apparent parabolic rise. However, this rise may have peaked as the top DeFi tokens have started to fall by as much as 60% or more across the board.

The summer of love for DeFi may have ended with the arrival of fall and prices followed.

Bitcoin technical and fundamentals point to strong outperformance in Q4 2020

With DeFi finally cooling down a bit, the ETH / BTC trading pair is also pointing to a retest of previous resistance turned support, which also coincides with the bottom of an increasingly wide wedge trend line, and what it would form the right shoulder into a massive reverse head and shoulder pattern.

The dip towards the bottom of the right shoulder and the new support test would also point to Bitcoin outperforming Ethereum until that support level is retested and held. Completing the reverse head and shoulders would allow Ethereum to regain the upper hand, but not until well into 2021.

Part of the reason Chua expects Bitcoin to “catch up” with Ethereum by the end of the year is due to “problems in the DeFi space,” along with “weaker on-chain metrics” on Ethereum compared to Bitcoin. as the convergence reasons.

 

Chua claims that daily new and active BTC addresses have risen, while ETH addresses have recently fallen. The DeFi mini-bubble deflated, causing upward sentiment to plunge. Meanwhile, Bitcoin is more bullish than ever, thanks to several corporate purchases of thousands of BTC, a considerable blow to the limited supply of BTC.

PrimeXBT Analyst: Bitcoin To Catch Up With DeFi-Driven Ethereum Gains In The New Year

“Although Ethereum had a bigger return gain over Bitcoin so far in 2020, we expect the ratio to reverse and BTC catch up on percentage gain relative to ETH,” explains PrimeXBT analyst Kim Chua .

“Problems in the DeFi space have led to weaker on-chain metrics for ETH, as suggested by the daily drop in new and active addresses, while that of BTC has risen,” he continued.

PrimeXBT, an award-winning Bitcoin-based trading platform offering forex, crypto assets, commodities, stock indices, and more, also allows traders to take advantage of the ebb and flow in the ETH / BTC ratio through leveraged trading crypto pairs. Other trading pairs include XRP / BTC, EOS / BTC, and LTC / BTC.   


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