Analysis: DeFi will be an important catalyst to push ETH valuation to $9,000
Recently, the blockchain data provider Glassnode stated that the signal of price recovery before the BTC rally between 2015 and 2017 has returned, and the rebound reached more than 9,200%.
According to Glassnode, the Puell Multiple index is hovering at levels that may offer an excellent risk-reward ratio.
“Nearly three weeks later, the Bitcoin Puell multiple will increase and enter the buying time zone. For investors with long-term goals, this will be an excellent entry point into BTC historically.”
From the perspective of miners' profitability, the Puell multiple predicts the bull market cycle by dividing the daily supply of Bitcoin by the 365-day moving average of BTC's daily issuance value. According to Glassnode, whenever BTC’s Puell multiple drops below 0.5, buying and holding can see considerable gains for long-term investors.
Indicators began to flicker as BTC bottomed out following the coronavirus-induced sell-off in March. The technical signal also marked the lows of 2019, 2015 and 2012.
But cryptocurrency analysts are not convinced that a major bull run will happen anytime soon. Trader and technician Jack Sparrow told his 49,000 followers on Twitter that he thinks BTC could experience another major downtrend. The pseudonymous analyst predicts that Bitcoin will retrace in the coming months and potentially regain support at $6,000.
Ethereum enthusiasts tweeted that BTC seems to be correcting for the rest of the summer whether or not there is a final rally, with July turning into a May 19 rocket candle (or the reverse in Nov 18), or if If not, sell off into the 6K range throughout the summer.
Meanwhile, analysts are considering the possibility that the decentralized finance (DeFi) movement will fuel the Ethereum bull run.
In 2017, ICO helped propel ETH's market cap to over $100 billion, and in the next cycle, DeFi may help push Ethereum to a $1 trillion market cap.
Joseph Todaro, managing partner of digital asset management firm BlockTownCap, said he believes DeFi is an important catalyst in driving Ethereum (ETH) valuation to $9,000.
On Twitter, former Wall Street bond trader John Todaro echoed the sentiments of Ethereum enthusiasts. The head of research at TradeBlock said he expects Ethereum's supply to plummet as more and more tokens are locked in DeFi platforms.
“There’s a lot of excitement about new DeFi tokens. Remember, most of the collateral locked across these platforms is in Ethereum. As the supply of excellent Ethereum drops and demand from DeFi platforms hits escape velocity, Ethereum will Hard to bounce back.”
Meanwhile, strategists are debating when and when XRP will emerge from its slumber.
An in-depth analysis of XRP’s performance in Japan shows that Ripple’s crypto asset continues to give off bearish readings.
According to BitBank analyst Yuya Hasegawa, XRP’s monthly dominance was 51.36% in 2018, while BTC’s monthly dominance was 34.57%. In February 2020, XRP’s dominance dropped sharply to 27.54%, while BTC’s dominance rose to 51.74%.
Hasegawa believes that Bitcoin will continue to exert its strength in the coronavirus world, and he expects XRP to eventually recover as the world adapts to the growth of digital payments.
“As cross-border movement is severely restricted, there is an opportunity for growth in demand for cross-border payments and remittances. Ripple, the issuer of XRP, already has a scalable infrastructure that enables fast and cheap cross-border remittances, and its use cases are world-wide Some areas are quietly growing."
In 2020, for long-term investors of digital assets, it will be the best opportunity to enter the market. Whether it is BTC, the leader of digital currency, or ETH, which is on the trend, everyone will be looking forward to it. So in the second half of the year, we will wait and see.
