Closely followed crypto analyst Nicholas Merten says Ethereum is gearing up to explode into a new bull market phase.
In a new strategy session, Merten takes a look at Ethereum’s market dominance, which shows ETH’s market share relative to all other crypto assets. He notes that Ethereum’s market dominance is poised for a breakout as it threatens to take out a crucial resistance area.
“Even with a variety of other cryptocurrencies now that Etheruem has to compete with or outpace to maintain market share, it’s been generally holding up at a resistance range we saw back here between March and May of 2017, around the 19% to 20% range for market dominance.
And this showcases that this is a really critical metric we need to watch for…And that is a huge psychological level because once we broke through that range, we climbed all the way up here to 32% market dominance, an over 50% increase of previous ownership of market share.”
A rise in Ethreum’s market dominance indicates that the leading smart contract platform is gaining in value faster than other crypto assets.
The analyst also says that Ethereum’s EIP-1559, the much-awaited upgrade that would burn a portion of the transaction fees, could help the bullish case for ETH by putting deflationary pressure on it.
“[EIP-1559] at the end of the day is going to mean we’re going to have less and less supply, and in fact with Ethereum’s monetary policy, the way that it’s currently working, if there is enough activity in the network, then it could actually turn ETH not only into an asset that has some form of a fixed supply, but also a truly deflationary supply, where the available ETH in the market starts to truly actually decrease rather than increase, even with staking rewards. And that’s a really interesting dynamic here that we have to keep in mind.”
According to Merten, Ethereum looks as ready as any crypto for a sizeable secondary bull market in the near future.
“I think Ethereum is a safe bet as we go into the bull market here. The continuation of altcoins, as we go into the secondary wave… We might very well have that secondary shoot-up like we had back here in the middle of 2017.”
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